<PAGE>
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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 semi-annual report of Georgia Daily Municipal
Income Fund, Inc. for the period June 1, 1999 through November 30,1999.
The Fund had net assets of $8,574,250 and 91 active shareholder as of November
30, 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
NOVEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (17.97%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 Cobb County, GA School District 12/31/99 2.85% $ 150,074 MIG-1
100,000 Cobb County, GA TAN 12/31/99 2.96 100,020 MIG-1 SP1+
150,000 Fulton County, GA School District 12/31/99 2.98 150,026 MIG-1
200,000 Gwinnett County, GA School District
(Construction Sales Tax Notes) 12/31/99 3.10 200,052 MIG-1
250,000 Richmond County, GA Board of Education (b)
GO Unlimited Refunding Bonds 03/01/00 3.23 250,728
500,000 Richmond County, GA Board of Education (b)
GO Unlimited Refunding Bonds 09/01/00 3.39 503,643
185,000 The State of Georgia - Series B (b) 03/01/00 3.09 186,055
---------- -----------
1,535,000 Total Other Tax Exempt Investments 1,540,598
---------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (72.37%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000 Adel IDA IDRB (Specialty Stampings, L.L.C.)
LOC National Bank of Canada 06/01/14 4.05% $ 300,000 VMIG-1
100,000 Brunswick & Glynn County, GA IDA (b)
(Coastal Sleeve Label Project)
LOC NationsBank 07/01/10 4.00 100,000
350,000 Burke, County, GA Development Authority
(Oglethorpe Power Corp. - Vogtle)
Insured by FGIC 01/01/16 3.85 350,000 VMIG-1 A1+
260,000 Clayton County, GA Housing Authority MHRB
(Chateau Forest Apartments - E)
Insured by FSA 01/01/21 3.85 260,000 VMIG-1 A1+
500,000 Clayton County, GA Housing Authority MHRB
(Williamsburg South Apartments)
LOC PNC Bank 12/01/28 4.05 500,000 VMIG-1
200,000 DeKalb County, GA Development Authority PCRB
(General Motors Corp.) 11/01/03 3.70 200,000 VMIG-1
100,000 Floyd County, GA Development Authority
(Georgia Kraft Company Project)
LOC Banque Nationale de Paris 12/01/15 3.80 100,000 P1
250,000 Fulton County, GA Development Authority RB
(Morehouse College Project)
LOC Wachovia Bank, N.A. 08/01/17 3.90 250,000 VMIG-1
245,000 Georgia State GO (Morgan Stanley) (b) 11/01/10 3.97 245,000
</TABLE>
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The accompanying notes are an integral part of these 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>
$ 500,000 Housing Authority of Atlanta, GA (Villages of East Lake Phase I)
LOC Bank of America 01/01/29 4.00% $ 500,000 A1+
500,000 Liberty County, GA (Harbin Lumber Company, Inc.) (b)
LOC Suntrust Bank 04/01/14 4.10 500,000
400,000 Marietta, GA Housing Authority MHRB (Wood Pointe Apts.)
LOC First Union National Bank 10/01/07 3.95 400,000 A1
100,000 Municipal Electric Authority of Georgia
(General Resolution Projects)
LOC Bayerische Landesbank 03/01/20 3.90 100,000 VMIG-1 A1+
400,000 Municipal Electric Authority of Georgia
(General Resolution Projects)
LOC Landesbank Hessen 06/01/20 3.90 400,000 VMIG-1 A1+
450,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC ABN AMRO Bank N.V. 01/01/26 3.80 450,000 VMIG-1 A1+
150,000 Richmond County, GA Development Authority Solid Waste RB
(Evergreen Nylon Recycling)
LOC Banque Nationale de Paris 07/01/32 3.95 150,000 P1 A1
400,000 Roswell City, GA (Azalea Project)- Series 1996
Collateralized by FNMA 06/15/25 3.90 400,000 A1+
100,000 Savannah, GA EDA (Kaolin Company)
LOC NationsBank 07/01/27 4.00 100,000 A1+
300,000 Savannah, GA Downtown Development Authority
(Savannah Parking Facilities) 09/01/00 3.80 300,000 VMIG-1 A1+
100,000 Savannah, GA Port Authority (Pier 1 Imports)
LOC Bank One, TX 12/01/26 4.02 100,000 A1+
500,000 St. Mary's, GA Development Authority (Trigen-Biopower Inc. Proj.)
LOC Toronto Dominion Bank 07/01/24 4.00 500,000 A1+
---------- -----------
6,205,000 Total Other Variable Rate Demand Instruments 6,205,000
---------- -----------
<CAPTION>
Put Bonds (10.73%)
- ------------------------------------------------------------------------------------------------------------------------------------
<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
200,000 Puerto Rico Industrial Environmental (Reynolds Metals)
LOC ABN AMRO Bank 09/01/00 3.50 200,000 VMIG-1 A-1+
500,000 Private Colleges & Universities Authority (Emory University Project) 03/09/00 3.70 500,000 VMIG-1 A-1+
---------- -----------
920,000 Total Put Bonds 920,000
---------- -----------
</TABLE>
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The accompanying notes are an integral part of these financial statements.
<PAGE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
NOVEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Commercial Paper (4.08%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 Puerto Rico Government Development Bank 01/19/00 3.20% $ 150,000 A1+
200,000 Puerto Rico Government Development Bank 01/26/00 3.60 200,000 A1+
---------- ----------
350,000 Total Tax Exempt Commercial Paper 350,000
---------- ----------
Total Investments (105.15%) (Cost $9,015,598+) $9,015,598
Liabilities in Excess of Cash and Other Assets (-5.15%) ( 441,348)
---------
Net Assets (100.00%) $8,574,250
==========
Net Asset Value, offering and redemption price per share:
Class A Shares, 7,151,713 Shares Outstanding (Note 3) $ 1.00
==========
Class B Shares, 1,422,537 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.
(a) 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.
(b) 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 IDRB = Industrial Development Authority
FGIC = Financial Guaranteed Insurance Company LOC = Letter of Credit
FNMA = Federal National Mortgage Association MHRB = Multi-family Housing Revenue Bond
FSA = Financial Security Assurance PCRB = Pollution Control Revenue Bond
GO = General Obligation RB = Revenue Bond
IDA = Industrial Development Authority TAN = Tax Anticipation Note
</TABLE>
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The accompanying notes are an integral part of these financial statements.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................................. $ 184,820
---------------
Expenses: (Note 2)
Investment management fee............................................................ 21,885
Administration fee................................................................... 11,490
Shareholder servicing fee............................................................ 11,336
Custodian expenses................................................................... 7,257
Shareholder servicing and related shareholder expenses............................... 3,092
Legal, compliance and filing fees.................................................... 10,494
Audit and accounting................................................................. 33,223
Directors' fees...................................................................... 3,153
Other................................................................................ 408
---------------
Total expenses..................................................................... 102,338
Less: Fees waived (Note 2)........................................................ ( 33,375)
Expenses reimbursed (Note 2)................................................ ( 30,339)
---------------
Net expenses....................................................................... 38,624
---------------
Net investment income................................................................... 146,196
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments................................................. -0-
---------------
Increase in net assets from operations.................................................. $ 146,196
===============
</TABLE>
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The accompanying notes are an integral part of these financial statements.
<PAGE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months July 14, 1998
Ended (Commencement of)
November 30, 1999 Operation) through
(Unaudited) May 31, 1999
--------- ------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income.................................... $ 146,196 $ 83,397
Net realized gain (loss) on investments.................. -0- -0-
---------------- ----------------
Increase in net assets from operations...................... 146,196 83,397
Dividends to shareholders from net investment income:
Class A.................................................. ( 119,331)* ( 81,415)*
Class B.................................................. ( 26,865)* ( 1,982)*
Capital share transactions (Note 3)
Class A.................................................. 569,044 6,482,669
Class B.................................................. 1,182,575 239,962
---------------- ----------------
Total increase (decrease)............................ 1,751,619 6,722,631
Net assets:
Beginning of period...................................... 6,822,631 100,000
---------------- ----------------
End of period............................................ $ 8,574,250 $ 6,822,631
================ ================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
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The accompanying notes are an integral part of these financial statements.
<PAGE>
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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. 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)
(UNAUDITED)
================================================================================
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, 1999 the Manager voluntarily waived investment
management fees and administration fees of $21,885 and $11,490, respectively. In
addition, although not required to do so, the Manager has agreed to reimburse
expenses amounting to $30,339.
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, 1999, 20,000,000,000 of shares of $.001 par stock were
authorized and capital paid in amounted to $8,574,250. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months July 14, 1998
Ended (Commencement of Operations) through
November 30, 1999 May 31, 1999
----------------- ------------
Class A
-------
<S> <C> <C>
Sold...................................... 30,397,468 11,405,269
Issued on reinvestment of dividends....... 115,976 74,457
Redeemed.................................. ( 29,944,400) ( 4,997,057)
--------------- --------------
Net increase (decrease)................... 569,044 6,482,669
=============== ==============
<CAPTION>
Six Months January 14, 1999
Ended (Commencement of Sales) through
November 30, 1999 May 31, 1999
----------------- ------------
Class B
-------
<S> <C> <C>
Sold...................................... 4,542,082 1,882,375
Issued on reinvestment of dividends....... 25,229 1,626
Redeemed.................................. ( 3,384,736) ( 1,644,039)
--------------- --------------
Net increase (decrease)................... 1,182,575 239,962
=============== ==============
</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 52% 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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<PAGE>
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5. Financial Highlights.
<TABLE>
<CAPTION>
Six Months July 14, 1998
Class A Ended (Commencement of Operations)
------- November 30, 1999 May 31, 1999
----------------- ------------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period................... $ 1.00 $ 1.00
-------------- --------------
Income from investment operations:
Net investment income............................... 0.013 0.022
Less distributions:
Dividends from net investment income................ ( 0.013 ) ( 0.022 )
------------ ------------
Net asset value, end of period......................... $ 1.00 $ 1.00
============= =============
Total Return........................................... 2.70%* 2.50%*
Ratios/Supplemental Data
Net assets, end of period (000)........................ $ 7,152 $ 6,583
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+ 0.75%* 0.79%*
Net investment income............................... 2.63%* 2.48%*
Management and administration fees waived........... 0.61%* 0.61%*
Expenses reimbursed................................. 0.55%* 1.58%*
Expense offsets..................................... -- 0.04%*
</TABLE>
* Annualized
+ Includes expense offsets.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
5. Financial Highlights (continued).
<TABLE>
<CAPTION>
Six Months January 14, 1999
Class B Ended (Commencement of Operations)
------- November 30, 1999 May 31, 1999
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C>
Net asset value, beginning of period................... $ 1.00 $ 1.00
------------- -------------
Income from investment operations:
Net investment income............................... 0.015 0.009
Less distributions:
Dividends from net investment income................ ( 0.015 ) ( 0.009 )
------------ ------------
Net asset value, end of period......................... $ 1.00 $ 1.00
============= =============
Total Return........................................... 2.95%* 2.47%*
Ratios/Supplemental Data
Net assets, end of period (000)........................ $ 1,422 $ 240
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+ 0.50%* 0.54%*
Net investment income............................... 2.87%* 2.66%*
Management and administration fees waived........... 0.61%* 0.61%*
Expenses reimbursed................................. 0.55%* 1.58%*
Expense offsets..................................... -- 0.04%*
</TABLE>
* Annualized
+ Includes expense offsets.
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
CHANGE IN INDEPENDENT ACCOUNTANTS
================================================================================
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition have joined
PwC.
The report of McGladrey on the financial statements of the Fund for the past
fiscal year contained no adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with its audit for the most recent fiscal year and through August
13, 1999, there were no disagreements with McGladrey on any matter of accounting
principle or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of McGladrey
would have caused it to make reference to the subject matter of disagreement in
connection with its report.
Effective August 13, 1999, the Fund, with the approval of its Board of Directors
and its Audit Committee, engaged PwC as its independent auditors.
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<PAGE>
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GEORGIA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Semi-Annual Report
November 30, 1999
(Unaudited)
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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
GA1199S
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