<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 annual report of Georgia Daily Municipal Income
Fund, Inc. for the year ended May 31, 2000.
The Fund had net assets of $13,110,114 and 120 active shareholder as of May 31,
2000.
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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<PAGE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
STATEMENT OF NET ASSETS
MAY 31, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (3.82%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 Richmond County, GA Board of Education GO
Unlimited Refunding Bonds (b) 09/01/00 3.41% $ 501,219
---------- -----------
500,000 Total Other Tax Exempt Investments 501,219
---------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (85.43%)
------------------------------------------------------------------------------------------------------------------------------------
<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 4.50% $ 300,000 VMIG-1
300,000 Atlanta, GA Urban Residential Finance MHRB
(New Community East Lake Project)
LOC Bank of America 11/01/28 4.50 300,000 A1+
400,000 Burke County, GA PCRB (Georgia Power Company Vogtle Project) 09/01/26 4.35 400,000 VMIG-1 A1
200,000 Burke County, GA Development Authority
(Oglethorpe Power Corp. Vogtle Project)
Insured by FGIC 01/01/16 4.10 200,000 VMIG-1 A1+
800,000 Carrollton, GA Payroll Development Authority
(KMB Produce Inc. Project) (b)
LOC First Union National Bank 03/01/19 4.55 800,000
260,000 Clayton County, GA Housing Authority MHRB
(Chateau Forest Apartments - E)
Insured by FSA 01/01/21 4.30 260,000 VMIG-1 A1+
400,000 Clayton County, GA Housing Authority MHRB
(Williamsburg South Apartments)
LOC PNC Bank 12/01/28 4.50 400,000 VMIG-1
200,000 Dekalb County, GA Development Authority IDRB (Pet Inc. Project)
LOC Credit Suisse First Boston 02/01/02 4.40 200,000 P1
600,000 Dekalb County, GA Development Authority IDRB (Pet Inc. Project)
LOC Credit Suisse First Boston 02/01/05 4.40 600,000 P1
200,000 DeKalb County, GA Development Authority PCRB
(General Motors Corp.) 11/01/03 4.30 200,000 VMIG-1
700,000 DeKalb County, GA Housing Authority MHRB (Wood Hills Apartments)
LOC Bank of Montreal 12/01/07 4.30 700,000 A1+
500,000 Fayette County, GA Development Authority IDRB
(Norman W. Paschall Company Project) (b)
LOC Branch Bank & Trust 12/01/05 4.45 500,000
100,000 Floyd County, GA Development Authority
(Georgia Kraft Company Project)
LOC Banque Nationale de Paris 12/01/15 4.45 100,000 P1
300,000 Fulco, GA Hospital Authority RB (Shepherd Center Inc. Project)
LOC Wachovia Bank, N.A. 09/01/17 4.10 300,000 A1+
</TABLE>
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The accompanying notes are an integral part of these financial statements.
<PAGE>
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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 (c) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 375,000 Fulton County, GA Development Authority RB
(Morehouse College Project)
LOC Wachovia Bank, N.A. 08/01/17 4.15% $ 375,000 VMIG-1
245,000 Georgia State GO (Morgan Stanley) (b) 11/01/10 4.40 245,000
500,000 Gwinnett County, GA Hospital System Inc.
Insured by MBIA Insurance Corp. 09/01/27 3.95 500,000 A1+
300,000 Hapeville, GA Development Authority (Hapeville Hotel)
LOC Deutsche Bank 11/01/15 4.45 300,000 P1
400,000 Housing Authority of Atlanta, GA (Villages of East Lake Phase I)
LOC Bank of America 01/01/29 4.50 400,000 A1+
470,000 Liberty County, GA (Harbin Lumber Company, Inc.) (b)
LOC Suntrust Bank 04/01/14 4.50 470,000
400,000 Marietta, GA Housing Authority MHRB (Wood Pointe Apartments)
LOC First Union National Bank 10/01/07 4.35 400,000 A1
100,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Bayerische Landesbank 03/01/20 4.10 100,000 VMIG-1 A1+
400,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC Landesbank Hessen 06/01/20 4.00 400,000 VMIG-1 A1+
450,000 Municipal Electric Authority of Georgia (General Resolution Projects)
LOC ABN AMRO Bank 01/01/26 4.25 450,000 VMIG-1 A1+
500,000 Private Colleges & Universities Authority RB
(Emory University Project) - Series C 11/01/03 3.95 500,000 VMIG-1 A1+
800,000 Richmond County, GA Development Authority Solid Waste RB
(Evergreen Nylon Recycling)
LOC Banque Nationale de Paris 07/01/32 4.20 800,000 P1 A1
300,000 Savannah, GA Downtown Development Authority RB
(Savannah Parking Facilities) 09/01/00 4.10 300,000 VMIG-1 A1+
300,000 Savannah, GA Port Authority (Pier 1 Imports)
LOC Bank One, TX 12/01/26 4.15 300,000 A1+
400,000 St. Mary's, GA Development Authority (Trigen-Biopower Inc. Project)
LOC Toronto Dominion Bank 07/01/24 4.20 400,000 A1+
---------- -----------
11,200,000 Total Other Variable Rate Demand Instruments 11,200,000
---------- -----------
<CAPTION>
Put Bonds (d) (8.16%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 Marietta, GA Housing Authority (Falls at Bells Ferry) 01/15/01 4.35% $ 400,000 VMIG-1
470,000 Puerto Rico Industrial Medical & Environmental RB
(Abbott Laboratories Project) (b) 03/01/01 4.00 470,000
200,000 Puerto Rico Industrial Environmental (Reynolds Metals)
LOC ABN AMRO Bank 09/01/00 3.50 200,000 VMIG-1 A1+
---------- -----------
1,070,000 Total Put Bonds 1,070,000
---------- -----------
</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)
MAY 31, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Commercial Paper (1.53%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 Puerto Rico Government Development Bank 08/03/00 3.60% $ 200,000 A1+
---------- ----------
200,000 Total Tax Exempt Commercial Paper 200,000
---------- ----------
Total Investments (98.94%) (Cost $12,971,219+) $12,971,219
Cash and Other Assets, Net of Liabilities (1.06%) 138,895
----------
Net Assets (100.00%) $13,110,114
==========
Net Asset Value, offering and redemption price per share:
Class A Shares, 12,141,058 Shares Outstanding (Note 3) $ 1.00
==========
Class B Shares, 969,056 Shares Outstanding (Note 3) $ 1.00
==========
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
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.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
FGIC = Financial Guaranteed Insurance Company LOC = Letter of Credit
FSA = Financial Security Assurance MHRB = Multi-family Housing Revenue Bond
GO = General Obligation PCRB = Pollution Control Revenue Bond
IDA = Industrial Development Authority RB = Revenue Bond
IDRB = Industrial Development Revenue Bond
</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 OPERATIONS
YEAR ENDED MAY 31, 2000
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest............................................................................. $ 430,956
--------------
Expenses: (Note 2)
Investment management fee............................................................ 46,308
Administration fee................................................................... 24,312
Shareholder servicing fee (Class A).................................................. 25,004
Custodian expenses................................................................... 10,522
Shareholder servicing and related shareholder expenses............................... 4,988
Legal, compliance and filing fees.................................................... 18,462
Audit and accounting................................................................. 67,272
Directors' fees...................................................................... 6,204
Other................................................................................ 954
--------------
Total expenses..................................................................... 204,026
Less: Fees waived (Note 2)........................................................ ( 70,620)
Expenses reimbursed (Note 2)................................................ ( 50,585)
--------------
Net expenses....................................................................... 82,821
Net investment income.................................................................... 348,135
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments.................................................. -0-
--------------
Increase in net assets from operations................................................... $ 348,135
==============
</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>
July 14, 1998
Year (Commencement of
Ended Operations) through
May 31, 2000 May 31, 1999
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income.................................... $ 348,135 $ 83,397
Net realized gain (loss) on investments.................. -0- -0-
---------------- ---------------
Increase in net assets from operations....................... 348,135 83,397
Dividends to shareholders from net investment income:
Class A.................................................. ( 299,062)* ( 81,415)*
Class B.................................................. ( 49,073)* ( 1,982)*
Capital share transactions (Note 3)
Class A.................................................. 5,558,389 6,482,669
Class B.................................................. 729,094 239,962
---------------- ---------------
Total increase (decrease)............................ 6,287,483 6,722,631
Net assets:
Beginning of period...................................... 6,822,631 100,000
---------------- ---------------
End of period............................................ $ 13,110,114 $ 6,822,631
================ ===============
</TABLE>
* Designated as exempt-interest dividends for federal income tax purposes.
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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
================================================================================
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 accounting principles
generally accepted in the United States 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 accounting
principles generally accepted in the United States 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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<PAGE>
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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 a service fee equal to .25% of the Fund's
average daily net assets only with respect to its Class A shares.
For the year ended May 31, 2000 the Manager voluntarily waived investment
management fees and administration fees of $46,308 and $24,312, respectively. In
addition, although not required to do so, the Manager has agreed to reimburse
expenses amounting to $50,585.
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, 2000, 20,000,000,000 shares of $.001 par stock were authorized and
capital paid in amounted to $13,110,114. Transactions in capital stock, all at
$1.00 per share, were as follows:
<TABLE>
<CAPTION>
Year July 14, 1998
Ended (Commencement of Operations) through
May 31, 2000 May 31, 1999
Class A ------------ ------------
-------
<S> <C> <C>
Sold...................................... 55,338,971 11,405,269
Issued on reinvestment of dividends....... 303,593 74,457
Redeemed.................................. ( 50,084,175) ( 4,997,057)
--------------- --------------
Net increase (decrease)................... 5,558,389 6,482,669
=============== ==============
<CAPTION>
Year January 14, 1999
Ended (Commencement of Sales) through
May 31, 2000 May 31, 1999
Class B ------------ ------------
-------
<S> <C> <C>
Sold...................................... 9,921,719 1,882,375
Issued on reinvestment of dividends....... 46,538 1,626
Redeemed.................................. ( 9,239,163) ( 1,644,039)
--------------- --------------
Net increase (decrease)................... 729,094 239,962
=============== ==============
</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 68% 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>
Year July 14, 1998
Class A Ended (Commencement of Operations)
------- May 31, 2000 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.................................... 0.030 0.022
Less distributions:
Dividends from net investment income..................... ( 0.030 ) ( 0.022 )
------------ ------------
Net asset value, end of period.............................. $ 1.00 $ 1.00
============= =============
Total Return................................................ 3.00% 2.20%++
Ratios/Supplemental Data
Net assets, end of period (000)............................. $ 12,141 $ 6,583
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+... 0.75% 0.79%*
Net investment income.................................... 2.99% 2.48%*
Management and administration fees waived................ 0.61% 0.61%*
Expenses reimbursed...................................... 0.44% 1.58%*
Expense offsets.......................................... 0.00% 0.04%*
</TABLE>
++ Not annualized
* Annualized
+ Includes expense offsets.
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<PAGE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
5. Financial Highlights.
<TABLE>
<CAPTION>
Year January 14, 1999
Class B Ended (Commencement of Sales)
------- May 31, 2000 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.................................... 0.032 0.009
Less distributions:
Dividends from net investment income..................... ( 0.032 ) ( 0.009 )
------------ ------------
Net asset value, end of period.............................. $ 1.00 $ 1.00
============= =============
Total Return................................................ 3.26% 0.93%++
Ratios/Supplemental Data
Net assets, end of period (000)............................. $ 969 $ 240
Ratios to average net assets:
Expenses (net of fees waived and expenses reimbursed)+... 0.50% 0.54%*
Net investment income.................................... 3.12% 2.66%*
Management and administration fees waived................ 0.61% 0.61%*
Expenses reimbursed...................................... 0.44% 1.58%*
Expense offsets.......................................... 0.00% 0.04%*
</TABLE>
++ Not annualized
* Annualized
+ Includes expense offsets.
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<PAGE>
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GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Directors and Shareholders of
Georgia Daily Municipal Income Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Georgia Daily Municipal Income Fund, Inc. (the "Fund") at May 31, 2000, and the
results of its operations, the changes in its net assets and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at May 31, 2000 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above. The financial statements for the period ended May 31, 1999,
including the financial highlights, were audited by other independent
accountants whose report dated June 28, 1999 expressed an unqualified opinion on
those financial statements.
PricewaterhouseCoopers LLP
New York, New York
June 27, 2000
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<PAGE>
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GEORGIA
DAILY
MUNICIPAL
INCOME
FUND, INC.
Annual Report
May 31, 2000
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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
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
GA5/00A
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<PAGE>
