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GEORGIA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, NY 10020
INCOME FUND, INC. 212-830-5200
================================================================================
Dear Shareholder:
We are pleased to present the annual report of Georgia Daily Municipal Income
Fund, Inc. for the period July 14, 1998 (Commencement of Operations) through May
31, 1999.
The Fund had net assets of $6,822,631 and 40 active shareholder as of May 31,
1999.
Thank you for your support and we look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
MAY 31, 1999
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<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Tax Exempt Investments (15.17%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 Cobb County, GA School District 12/31/99 2.85% $ 150,529 MIG-1
100,000 Cobb County, GA TAN 12/31/99 2.96 100,142 MIG-1 SP1+
100,000 Commonwealth of Puerto Rico, TRAN 07/30/99 2.83 100,104 MIG-1 SP1+
150,000 Fulton County, GA School District 12/31/99 2.98 150,186 MIG-1
200,000 Gwinnett County, GA School District (Construction Sales Tax Notes) 12/31/99 3.10 200,366 MIG-1
185,000 State of Georgia - Series B (b) 03/01/00 3.01 188,177
145,000 State of Georgia - Series D 08/01/99 3.43 145,765 Aaa AAA
---------- ----------
1,030,000 Total Other Tax Exempt Investments 1,035,269
---------- ----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (71.89%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000 Atlanta, GA Urban Residential Finance Authority
MHRB (Parcel 25, Project A)
LOC First Union National Bank 12/01/14 3.35% $ 300,000 A1
440,000 Baldwin County, GA IDA (Williams Barnet And Sons Project)
LOC Fleet National Bank 12/01/99 3.72 440,000 A1
100,000 Bartow County, GA Development Authority PCR
(Georgia Power Company Plant) 06/01/23 3.35 100,000 VMIG-1
200,000 Bartow County, GA Development Authority PCR
(Georgia Power Company Plant) 03/01/25 3.50 200,000 VMIG-1 A1
100,000 Brunswick & Glynn County, GA IDA
(Coastal Sleeve Label Project) (b)
LOC NationsBank 07/01/10 3.35 100,000
200,000 Burke County, GA PCR (Georgia Power Company Plant V) 07/01/24 3.40 200,000 VMIG-1 A1
100,000 Burke County, GA PCR (Georgia Power Company Vogtle) 2nd Series 04/01/25 3.40 100,000 VMIG-1 A1
260,000 Clayton County, GA Housing Authority MHRB
(Chateau Forest Apartments - E)
Insured by FSA 01/01/21 3.30 260,000 VMIG-1 A1+
400,000 Cobb County Housing Authority, GA MHRB
(Greenhouse Frey Apartments Project)
Guaranteed by Federal National Mortgage Association 09/15/26 3.40 400,000 A1+
400,000 Dekalb County, GA Development Authority IDRB
(Pet Inc. Project)
LOC Credit Suisse First Boston 02/01/04 3.30 400,000 P1
250,000 County of DeKalb, GA Housing Authority MHRB
(Wood Hills Apartments)
LOC Bank of Montreal 12/01/07 3.30 250,000 A1+
</TABLE>
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See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Variable Rate Demand Instruments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000 Development Authority Of Monroe County
(Georgia Power Company) Series- 1995 07/01/25 3.40% $ 300,000 P1 A1
100,000 Floyd County, GA Development Authority
(Georgia Kraft Company Project)
LOC Banque Nationale de Paris 12/01/15 3.45 100,000 P1
150,000 Fulco, GA Hospital Authority RB (Shepherd Center, Inc. Project)
LOC Wachovia Bank, N.A. 09/01/17 3.15 150,000 A1+
100,000 Glynn-Brunswick Memorial Hospital
(Southeast GA Health Systems)
Insured by MBIA Insurance Corp. 08/01/16 3.15 100,000 VMIG-1 A1
200,000 Gwinnett County Georgia Hospital
(Gwinnet Hospital System Incorporated)
Insured by MBIA Insurance Corp. 09/01/27 3.40 200,000 A1+
255,000 Macon-Bibb County, GA Hospital Authority RB
(Medical Center of Central Georgia)
LOC Suntrust Bank 04/01/07 3.30 255,000 VMIG-1
100,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Bayerische Landesbank 03/01/20 3.30 100,000 VMIG-1 A1+
150,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Landesbank Hessen 06/01/20 3.20 150,000 VMIG-1 A1+
150,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC ABN AMRO Bank N.V. 01/01/26 3.30 150,000 VMIG-1 A1+
300,000 Municipal Gas Authority of Georgia RB - Series A
LOC Credit Suisse First Boston/Morgan Guaranty Trust Company
/Wachovia Bank, N.A./ABN AMRO Bank, N.V./Bayerishe Landesbank 11/01/06 3.15 300,000 A1+
150,000 Richmond County Development Authority Solid Waste RB
(Evergreen Nylon Recycling)
LOC Banque Nationale de Paris 07/01/32 3.30 150,000 P1 A1
100,000 Savannah, GA EDA (Kaolin Company)
LOC NationsBank 07/01/27 3.35 100,000 A1+
100,000 Savannah Port Authority (Pier 1 Imports)
LOC Bank One, TX 12/01/26 3.50 100,000 A1
---------- ----------
4,905,000 Total Other Variable Rate Demand Instruments 4,905,000
---------- ----------
<CAPTION>
Put Bond (3.23%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 220,000 Puerto Rico Industrial, Medical & Environmental RB
(Abbott Laboratories Project) 03/01/00 2.90% $ 220,000 Aa1 AAA
---------- ----------
220,000 Total Put Bond 220,000
---------- ----------
</TABLE>
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See Notes to Financial Statements.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
MAY 31, 1999
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<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Tax Exempt Commercial Paper (8.06%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 Development Authority of Burke County, GA
(Ogelthorpe Power 1998B)
Insured by AMBAC Indemnity Corp. 06/23/99 3.35% $ 400,000 VMIG-1 A1+
150,000 Puerto Rico Government Development Bank 06/02/99 3.30 150,000 A1+
---------- ----------
550,000 Total Tax Exempt Commercial Paper 550,000
---------- ----------
Total Investments (98.35%) (Cost $6,710,269+) 6,710,269
Cash and Other Assets, Net of Liabilities (1.65%) 112,362
----------
Net Assets (100.00%) $6,822,631
==========
Net Asset Value, offering and redemption price per share:
Class A Shares, 6,582,669 Shares Outstanding (Note 3) $ 1.00
==========
Class B Shares, 239,962 Shares Outstanding (Note 3) $ 1.00
==========
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company of the bank whose letter of
credit guarantees the issue or the insurance company who insures the issue.
All letters of credit and insurance are irrevocable and direct pay covering
both principal and interest. Certain issuers have either a line of credit,
a liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue.
(b) Securities that are not rated have been determined by the Fund's Board of
Directors to be of comparable quality to the rated securities in which the
Fund may invest.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and where indicated are unconditionally secured as
to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
EDA = Economic Development Authority MHRB = Multi-family Housing Revenue Bond
FSA = Financial Security Assurance PCR = Pollution Control Revenue
IDA = Industrial Development Authority RB = Revenue Bond
IDRB = Industrial Development Revenue Bond TAN = Tax Anticipation Note
LOC = Letter of Credit TRAN = Tax and Revenue Anticipation Note
</TABLE>
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See Notes to Financial Statements.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF OPERATIONS
JULY 14, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH MAY 31, 1999
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<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................................. $ 108,385
--------------
Expenses: (Note 2)
Investment management fee............................................................ 13,426
Administration fee................................................................... 7,049
Shareholder servicing fee (Class A).................................................. 8,205
Custodian expenses................................................................... 1,042
Shareholder servicing and related shareholder expenses............................... 800
Legal, compliance and filing fees.................................................... 12,959
Audit and accounting................................................................. 49,043
Directors' fees...................................................................... 6,183
Other................................................................................ 1,140
--------------
Total expenses..................................................................... 99,847
Less: Fees waived (Note 2)........................................................ ( 20,475)
Expenses paid indirectly (Note 2).......................................... ( 1,250)
Expenses reimbursed (Note 2)................................................ ( 53,134)
--------------
Net expenses....................................................................... 24,988
--------------
Net investment income................................................................... 83,397
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments................................................. -0-
--------------
Increase in net assets from operations.................................................. $ 83,397
==============
</TABLE>
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See Notes to Financial Statements.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
JULY 14, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH MAY 31, 1999
================================================================================
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS
<S> <C>
Operations:
Net investment income.................................................. $ 83,397
Net realized gain (loss) on investments................................ -0-
---------------
Increase in net assets from operations.................................... 83,397
Dividends to shareholders from net investment income:
Class A................................................................ ( 81,415)*
Class B................................................................ ( 1,982)*
Capital share transactions (Note 3)
Class A................................................................ 6,482,669
Class B................................................................ 239,962
---------------
Total increase (decrease).......................................... 6,722,631
Net assets:
Beginning of period.................................................... 100,000
---------------
End of period.......................................................... $ 6,822,631
===============
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
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See Notes to Financial Statements.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
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1. Summary of Accounting Policies.
Georgia Daily Municipal Income Fund, Inc. is a no-load, non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940. This Fund is a short term, tax exempt money market fund. The Fund
has two classes of stock authorized, Class A and Class B. The Class A shares are
subject to a service fee pursuant to the Distribution and Service Plan. The
Class B shares are not subject to a service fee. Additionally, the Fund may
allocate among its classes certain expenses to the extent allowable to specific
classes, including transfer agent fees, government registration fees, certain
printing and postage costs, and administrative and legal expenses. Class
specific expenses of the Fund were limited to shareholder servicing fees and
transfer agent expenses. In all other respects the Class A and Class B shares
represent the same interest in the income and assets of the Fund. The Fund's
financial statements are prepared in accordance with generally accepted
accounting principles for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income to its shareholders. Therefore, no
provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management L.P. (Manager), equal to .40% of the Fund's
average daily net assets.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .21% of the Fund's average daily net assets.
Pursuant to the Distribution and Service Plan adopted under Securities and
Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc.,
(the Distributor), an affiliate of the Manager, have entered into a Distribution
Agreement and a Shareholder Servicing Agreement, only with respect to its Class
A shares. For its services under the Shareholder Servicing Agreement, the
Distributor receives from the Fund, only with respect to its Class A shares, a
service fee equal to .25% of the Fund's average daily net assets.
For the period ended May 31, 1999 the Manager voluntarily waived investment
management fees and administration fees of $13,426 and $7,049, respectively. In
addition, although not required to do so, the Manager has agreed to reimburse
expenses amounting to $53,134.
Included in the Statement of Operations under the caption "Custodian expenses"
are expense offsets of $1,250.
Fees are paid to Trustees who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
3. Capital Stock.
At May 31, 1999, 20,000,000,000 of shares of $.001 par stock were authorized and
capital paid in amounted to $6,822,631. Transactions in capital stock, all at
$1.00 per share, were as follows:
<TABLE>
<CAPTION>
July 14, 1998
Class A (Commencement of Operations) through
------- May 31, 1999
------------
<S> <C>
Sold................................... 11,405,269
Issued on reinvestment of dividends.... 74,457
Redeemed............................... ( 4,997,057)
-------------
Net increase (decrease)................ 6,482,669
=============
<CAPTION>
January 14, 1999
Class B (Commencement of Sales) through
------- May 31, 1999
------------
<S> <C>
Sold................................... 1,882,375
Issued on reinvestment of dividends.... 1,626
Redeemed............................... ( 1,644,039)
-------------
Net increase (decrease)................ 239,962
=============
</TABLE>
4. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of Georgia and, accordingly, is subject to the credit risk associated with the
non-performance of such issuers. Approximately 45% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the credit worthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
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<TABLE>
<CAPTION>
5. Financial Highlights.
July 14, 1998
Class A (Commencement of Operations)
- ------- May 31, 1999
------------
<S> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period....................... $ 1.00
----------=
Income from investment operations:
Net investment income.................................... 0.022
Less distributions:
Dividends from net investment income..................... ( 0.022 )
-----------
Net asset value, end of period............................. $ 1.00
===========
Total Return............................................... 2.50%*
Ratios/Supplemental Data
Net assets, end of period (000)............................ $ 6,583
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+... 0.79%*
Net investment income.................................... 2.48%*
Management and administration fees waived................ 0.61%*
Expenses reimbursed...................................... 1.58%*
Expense offsets.......................................... 0.04%*
* Annualized
+ Includes expense offsets.
</TABLE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights. (Continued)
January 14, 1999
Class B (Commencement of Sales)
- ------- May 31, 1999
------------
<S> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period....................... $ 1.00
-----------
Income from investment operations:
Net investment income.................................... 0.009
Less distributions:
Dividends from net investment income..................... ( 0.009 )
-----------
Net asset value, end of period............................. $ 1.00
===========
Total Return............................................... 2.47%*
Ratios/Supplemental Data
Net assets, end of period (000)............................ $ 240
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+... 0.54%*
Net investment income.................................... 2.66%*
Management and administration fees waived................ 0.61%*
Expenses reimbursed...................................... 1.58%*
Expense offsets.......................................... 0.04%*
* Annualized
+ Includes expense offsets.
</TABLE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
INDEPENDENT AUDITOR'S REPORT
================================================================================
The Board of Directors and Shareholders
Georgia Daily Municipal Income Fund, Inc.
We have audited the accompanying statement of net assets of Georgia Daily
Municipal Income Fund, Inc. as of May 31, 1999, and the related statements of
operations, the statement of changes in net assets and the financial highlights
for the period from July 14, 1998 (Commencement of Operations) through May 31,
1999. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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. Our
procedures included confirmation of securities owned as of May 31, 1999, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides 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
Georgia Daily Municipal Income Fund, Inc. as of May 31, 1999, the results of its
operations, the changes in its net assets and the financial highlights for the
period from July 14, 1998 through May 31, 1999, in conformity with generally
accepted accounting principles.
\s\McGladrey & Pullen, LLP
New York, New York
June 28, 1999
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GEORGIA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Annual Report
May 31, 1999
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<PAGE>
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- -------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not authorized
for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective
prospectus, which includes information regarding the
Fund's objectives and policies, experience of its
management, marketability of shares, and other
information.
- -------------------------------------------------------
Georgia Daily Municipal Income Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
GA599A
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