<PAGE>
- --------------------------------------------------------------------------------
GEORGIA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, NY 10020
INCOME FUND, INC. 212-830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Georgia Daily Municipal
Income Fund, Inc. for the period July 14, 1998 (Commencement of Sales) through
November 30,1998.
The Fund had net assets of $3,128,026 and 1 active shareholder as of November
30, 1998.
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
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
NOVEMBER 30, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Tax Exempt Investments (20.74%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 Catersville, GA TAN (b) 12/31/98 3.54% $ 150,048
100,000 Commonwealth of Puerto Rico TRAN 07/30/99 2.83 100,420 MIG-1 SP1+
100,000 Floyd County, GA TAN (b) 12/31/98 3.57 100,014
145,000 State of Georgia - Series D 08/01/99 3.33 148,046 Aaa AAA
150,000 Richmond County, GA Board of Education Refunding Bond (b) 03/01/99 3.28 150,345
---------- ----------
645,000 Total Other Tax Exempt Investments 648,873
---------- ----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (75.29%)
- ------------------------------------------------------------------------------------------------------------------------------------
<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 3.25% $ 300,000 A1
290,000 Baldwin County, GA IDA RB (Williams Barnet & Sons Project)
LOC Fleet Bank 12/01/99 3.77 290,000 A1
150,000 Bartow County, GA PCRB (Georgia Power Company Plant - Bow) 03/01/24 3.30 150,000 VMIG-1 A1+
260,000 Clayton County, GA Housing Authority MHRB
(Chateau Forest Apartments - E)
FSA Insured 01/01/21 3.15 260,000 VMIG-1 A1+
150,000 Cobb County Housing Authority, GA MHRB
(Greenhouse Frey Apts. Project)
FNMA Collateralized 09/15/26 3.15 150,000 A1+
150,000 County of DeKalb, GA Housing Authority MHRB
(Wood Hills Apartments)
LOC Bank of Montreal 12/01/07 3.25 150,000 A1+
150,000 Coweta County, GA IDA RB (Jack Eckerd Project) (b)
LOC Union Bank of Switzerland 03/01/09 3.35 150,000
150,000 Fulco, GA Hospital Authority RB (Shepherd Center, Inc. Project)
LOC Wachovia Bank, N.A. 09/01/17 3.10 150,000 A1+
255,000 Macon-Bibb County, GA Hospital Authority RB
(Medical Center of Central Georgia)
LOC Suntrust Bank 04/01/07 3.20 255,000 VMIG-1
150,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC ABN AMRO Bank N.V. 01/01/26 3.10 150,000 VMIG-1 A1+
100,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Bayerische Landesbank 03/01/20 3.20 100,000 VMIG-1 A1+
150,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Landesbank Hessen 06/01/20 3.10 150,000 VMIG-1 A1+
100,000 Savannah, GA EDA (Kaolin Company)
LOC NationsBank 07/01/27 3.30 100,000 A1+
---------- ----------
2,355,000 Total Other Variable Rate Demand Instruments 2,355,000
---------- ----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Tax Exempt Commercial Paper (4.80%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 Puerto Rico Government Development Bank 12/10/98 3.00% $ 150,000 A1+
---------- ----------
150,000 Total Tax Exempt Commercial Paper 150,000
---------- ----------
Total Investments (100.83%) (Cost $3,153,873+) $3,153,873
Due from Manager (0.78%) (Note 2) 24,479
Liabilities in Excess of Cash and Other Assets (-1.61%) ( 50,326)
----------
Net Assets (100.00%) $3,128,026
==========
Net Asset Value, offering and redemption price per share:
Class A Shares, 3,128,026 Shares Outstanding (Note 3) $ 1.00
==========
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTES:
(a) The ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or guarantor of the
bond. P1 and A1+ are the highest ratings assigned for tax exempt commercial
paper.
(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 PCRB = Pollution Control Revenue Bond
IDA = Industrial Development Authority RB = Revenue Bond
LOC = Letter of Credit TAN = Tax Anticipation Note
MHRB = Multi-family Housing Revenue Bond TRAN = Tax and Revenue Anticipation Note
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF OPERATIONS
JULY 14, 1998 (COMMENCEMENT OF SALES) THROUGH NOVEMBER 30, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................................. $ 40,243
---------------
Expenses: (Note 2)
Investment management fee............................................................ 4,775
Administration fee................................................................... 2,507
Shareholder servicing fee............................................................ 2,985
Custodian expenses................................................................... 346
Shareholder servicing and related shareholder expenses............................... 337
Legal, compliance and filing fees.................................................... 7,930
Audit and accounting................................................................. 18,722
Directors' fees...................................................................... 3,158
Other................................................................................ 507
---------------
Total expenses..................................................................... 41,267
Less: Fees waived (Note 2)........................................................ ( 7,282)
Expense paid indirectly (Note 2)........................................... ( 552)
Expenses reimbursed (Note 2)................................................ ( 24,479)
---------------
Net expenses....................................................................... 8,954
---------------
Net investment income.................................................................. 31,289
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments................................................. -0-
---------------
Increase in net assets from operations.................................................. $ 31,289
===============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
July 14, 1998
(Commencement of Sales)
through
November 30, 1998
-----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C>
Operations:
Net investment income.................................................. $ 31,289
Net realized gain (loss) on investments................................ -0-
----------------
Increase in net assets from operations..................................... 31,289
Dividends to shareholders from net investment income:
Class A................................................................ ( 31,289)*
Capital share transactions (Note 3)
Class A................................................................ 3,028,026
----------------
Total increase (decrease).......................................... 3,028,026
Net assets:
Beginning of period.................................................... 100,000
----------------
End of period.......................................................... $ 3,128,026
================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
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 distribution 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. As of November 30, 1998
there were no class B shares outstanding. 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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
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 November 30, 1998 the Manager voluntarily waived investment
management fees and administration fees of $4,775 and $2,507, respectively. In
addition, although not required to do so, the Manager has agreed to reimburse
expenses amounting to $24,479.
Included in the Statement of Operations under the captions "Custodian expenses"
and "Audit and accounting" are expense offsets of $552.
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 November 30, 1998, 20,000,000,000 of shares of $.001 par stock were
authorized and capital paid in amounted to $3,128,026. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
July 14, 1998
(Commencement of Sales)
through
November 30, 1998
-----------------
<S> <C>
Class A
Sold...................................... 3,000,000
Issued on reinvestment of dividends....... 28,026
Redeemed.................................. -0-
-------------
Net increase (decrease)................... 3,028,026
=============
</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 57% 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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights.
July 14, 1998
Class A (Commencement of Sales)
- ------- November 30, 1998
-----------------
<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.................................... 0.010
Less distributions:
Dividends from net investment income..................... ( 0.010 )
------------
Net asset value, end of period............................. $ 1.00
============
Total Return............................................... 2.65%*
Ratios/Supplemental Data
Net assets, end of period (000)............................ $ 3,128
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+... 0.80%*
Net investment income.................................... 2.62%*
Management and administration fees waived................ 0.61%*
Expenses reimbursed...................................... 2.05%*
Expense offsets.......................................... 0.05%*
* Annualized
+ Includes expense offsets.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
GEORGIA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Semi-Annual Report
November 30, 1998
(Unaudited)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- -------------------------------------------------------
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
- --------------------------------------------------------------------------------
<PAGE>
