DK INVESTORS, INC.
________________________________
1999 ANNUAL REPORT
________________________________
DK INVESTORS, INC.
205 Lexington Avenue, 16th Floor
New York, New York 10016
(212) 779-4233
<PAGE>
DK INVESTORS, INC.
205 Lexington Avenue, 16th Floor
New York, New York 10016
(212) 779-4233
To Our Shareholders:
1999 was a year of turmoil in the financial markets. The stock market
was up and then down, up again and down again. The bond market was on
a similar roller coaster. It seemed that each week new rumors, Fed
disclosures, employment figures, etc. changed the complexion of both
the equity and fixed income markets.
I can happily report that the per share price of our DK Investors
stock closed 1999 at a price of $9.50. I also report to you that,
even though bond interest rates are way down, we have been able,
through the efforts of our investment advisor and your board of
directors, to earn enough to pay federally tax exempt dividends of
59 cents per share during 1999. This was accomplished not only
through prudent investments, but also by keeping our expenses down to
less than 1% of DK's average net assets.
In 1999, DK Investors, Inc., earned income of $824,104, resulting in
net investment income of $681,854. The year 2000 appears to be another
year of unsettled markets. What will the Fed do? Will the stock market
turn sour, or consumer confidence in the economy wane, thereby
causing a flight of money to fixed income securities? The
possibilities are myriad. However, I can assure you that your board of
directors, in concert with our investment advisor, will continue its
diligent efforts to support the stock of DK Investors, Inc., as well
as to earn the maximum annual income on our investments consistent
with the parameters set forth in the 1978 prospectus. We believe that
quality will eventually carry the day.
Our annual meeting will be held on May 10, 2000, at the office of
the company. I welcome the attendance of any shareholder who wishes
to attend.
Sincerely,
Gene Nadler
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
DECEMBER 31, 1999
To the Shareholders and Board of Directors DK Investors Inc.
We have examined the statements of assets and liabilities of DK Investors
Inc. including the portfolio of investments as of December 31, 1999 and
1998 and the related statements of operations and changes in net assets
for the years then ended and supplementary information for the five years
then ended. Our examination was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as we considered
necessary in the circumstances, including confirmation of securities owned
at December 31, 1999 by correspondence with the custodian.
In our opinion, the financial statements referred to above present fairly
the net assets of DK Investors Inc. at December 31, 1999 and 1998 and the
results of its operations and the changes in its net assets for the years
then ended, in conformity with generally accepted accounting principles
applied on a consistent basis. Also, in our opinion, the supplementary
information for the five years ended December 31, 1999 is fairly stated
in all respects material in relation to the financial statements taken as
a whole.
CUMMINGS & CARROLL, P.C.
Certified Public Accountants
February 18, 2000
Great Neck, New York
<PAGE>
DK INVESTORS INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31,
<TABLE>
ASSETS
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Investments in securities at market
(identified cost - 1999 $14,908,198
1998 $15,000,211) $ 14,668,143 $ 15,140,949
Accrued interest receivable 264,479 291,785
Deferred charge 3,163 6,445
Cash 5,210 36,308
------------ ------------
Total Assets $ 14,940,995 $ 15,475,487
============ ============
</TABLE>
LIABILITIES
<TABLE>
1999 1998
------------ ------------
<S> <C> <C>
Payable for securities purchased $ 26,903 $ -
Accrued expenses 20,283 21,804
Dividends payable
(1999 - January 10, 2000
1998 - January 11, 1999) 164,600 176,350
------------ ------------
Total Liabilities 211,786 198,154
------------ ------------
Net assets
(equivalent to $12.53 and $12.99 per
share respectively, based on
1,175,664 shares capital stock
outstanding) $ 14,729,209 $ 15,277,333
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
DK INVESTORS INC.
INVESTMENT IN SECURITIES
DECEMBER 31, 1999
<CAPTION>
% OF
INVESTMENT
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
- ---------- ------ -------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Garland TX Lt G.O. 8.000 2000 195,000 195,450 195,904 1.33%
Indiana Transp Fin. Auth 6.900 2000 150,000 150,954 151,620 1.03%
Wisc.Pub Pwr Sys 7.000 2000 500,000 506,081 507,230 3.46%
Carson City Nev Sch Dist 7.700 2001 265,000 275,500 275,266 1.88%
Delaware Trans Auth 7.100 2001 200,000 206,025 206,454 1.41%
Harrison Cnty MS Sch Dist 7.000 2002 70,000 73,935 73,347 0.50%
NYS Environ.Fac Corp. 7.300 2002 500,000 513,493 516,530 3.52%
Lewisville TX Indpt Sch Dist 7.500 2002 300,000 322,224 320,574 2.18%
Hamilton Twp NJ Sch Dist 7.000 2002 260,000 278,332 277,126 1.89%
Lincoln, MI Cons Sch Dist 7.000 2003 325,000 353,905 347,548 2.37%
Rowlett, TX 6.000 2004 170,000 179,971 177,439 1.21%
Gladstone MI Pub Sch 6.500 2005 100,000 111,123 107,407 0.73%
NYS Dorm Auth 6.500 2005 250,000 272,196 265,765 1.81%
FL St Brd Mand SKG 7.500 2005 20,000 20,800 20,254 0.14%
Metro Pier and Expo 6.250 2005 100,000 110,559 106,120 0.72%
Metro Pier and Expo 6.500 2005 310,000 343,580 330,646 2.25%
Jackson Miss Pub Sch 6.250 2005 130,000 139,457 138,476 0.94%
NY Dorm Auth 7.800 2005 50,000 52,432 51,410 0.35%
Port Seattle Wash Rev 7.300 2005 300,000 321,990 313,803 2.14%
NYS Dorm Auth Rev 6.500 2006 190,000 212,589 202,846 1.38%
Hawaii State 7.000 2006 500,000 515,090 506,080 3.45%
Wisc St. Clean Wtr Rev 6.125 2006 350,000 388,854 371,312 2.53%
Ohio St. Bldg. Auth 6.000 2006 210,000 227,317 222,319 1.52%
Scottsdale, AZ G/O 6.500 2006 250,000 276,142 271,747 1.85%
NJ Waste Wtr Treatment 7.000 2007 200,000 232,498 224,762 1.53%
Tucson, AZ Wtr 6.750 2007 200,000 226,507 221,404 1.51%
Wichita, KS W&S 6.000 2007 600,000 648,462 638,304 4.35%
Chicago,IL Met Wtr Reclam 7.000 2008 100,000 112,194 112,006 0.76%
NYS Dorm Auth 6.000 2008 240,000 266,601 249,000 1.70%
Intermountain Pwr UT 6.250 2008 300,000 322,415 322,272 2.20%
Las Vegas Valley Wtr 7.000 2008 225,000 241,995 233,224 1.59%
Brownville, TX Indpt Sch 7.250 2008 575,000 672,710 657,530 4.48%
Columbus Indiana Swr 7.250 2009 260,000 279,343 266,138 1.81%
Fort Bend Cnty Tx MunUtil 6.500 2009 375,000 419,540 410,385 2.80%
Pampa TX Wtr 7.400 2009 100,000 106,866 102,191 0.70%
Clark Cnty Nev Sch Dist 7.000 2009 350,000 363,487 365,246 2.49%
Mississippi St G/O 5.750 2009 300,000 312,012 312,834 2.13%
SE TX Hosp fin Agy 7.500 2009 90,000 93,701 99,067 0.68%
</TABLE>
<PAGE>
<TABLE>
DK INVESTORS INC.
INVESTMENT IN SECURITIES
DECEMBER 31, 1999
<CAPTION>
% OF
INVESTMENT
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
- ---------- ------ -------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
New Mexico Mtg Fin Auth 6.850 2010 25,000 25,282 25,196 0.17%
NV Hsg Dev 7.550 2010 260,000 265,247 264,235 1.80%
NYS Mtg Ser NN 7.450 2010 250,000 255,989 255,243 1.74%
RI Hsg & Mtg 7.700 2010 500,000 513,993 506,520 3.45%
Kenosha, Wisc Wtwks 7.000 2011 350,000 382,029 368,893 2.51%
Austin TX Util Sys 6.750 2012 100,000 104,357 104,817 0.75%
Birmingham ALA UT 6.600 2012 275,000 282,906 289,119 1.97%
Jonesboro, AR Indl Dev 6.500 2012 500,000 541,751 525,315 3.58%
Arkansas St. Dev. Fin. 7.000 2014 500,000 537,001 521,780 3.56%
Missouri St. Environmental 6.875 2014 110,000 120,585 115,936 0.79%
Indiana Mun Pwr 7.100 2015 100,000 106,636 102,000 0.70%
Missouri St Env Auth 7.200 2016 200,000 216,322 217,612 1.48%
Austin Comb Util 8.000 2016 125,000 139,049 130,776 0.89%
Maine St HSG Auth 7.100 2016 200,000 197,620 205,264 1.40%
Wisconsin HSG & ECO 7.350 2017 65,000 65,188 65,235 0.44%
Wisconsin HSG & ECO 6.400 2017 350,000 346,500 354,277 2.41%
Michigan St. Hosp. 7.500 2018 175,000 192,611 184,347 1.26%
Richmond, VA 6.250 2021 250,000 268,802 259,992 1.78%
$13,945,000 $14,908,198 $14,668,143 100.00%
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>DK INVESTORS INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Income
- ------
Interest - municipal obligations
(Less amortization of premiums
1999 $140,094; 1998 $125,363) $ 824,104 $ 888,234
--------- ---------
Expenses
- --------
Investment advisory fee 59,294 60,380
Shareholder servicing costs, including
transfer agent and dividend disbursing
agent fees and expense 5,155 5,235
Reports to shareholders 8,608 9,259
Legal fees 25,356 25,467
Auditing fees 12,500 12,500
Directors fees 7,800 7,500
Insurance 20,361 36,276
Miscellaneous 3,174 3,094
--------- ---------
142,248 159,711
--------- ---------
Net investment income $ 681,856 $ 728,523
========= =========
</TABLE>
<TABLE>
Realized and Unrealized Gain (loss) on Investments
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Realized gain (loss) from sale of securities
(excluding short-term securities)
Proceeds from sales $4,015,401 $4,017,650
Cost of securities sold 4,170,940 4,165,386
----------- -----------
Realized gain (loss) (155,539) (147,736)
----------- -----------
Unrealized appreciation (depreciation
of investments)
Beginning of period 140,713 72,736
End of period (240,055) 140,713
----------- -----------
Increase (decrease) in unrealized
appreciation (380,768) 67,977
Total Realized and Unrealized Gain (loss)
on Investments $ (536,307) $ (79,759)
</TABLES>
See notes to financial statements.
<PAGE>
</TABLE>
<TABLE>
DK INVESTORS INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
INVESTMENT ACTIVITIES
Net investment income $ 681,856 $ 728,523
Realized and unrealized gain (loss) on
investments (536,307) ( 79,759)
Distributions to shareholders (693,673) (740,694)
----------- ------------
Increase (decrease) in net assets (548,124) ( 91,930)
NET ASSETS
Beginning of year 15,277,333 15,369,263
----------- ------------
End of year $14,729,209 $15,277,333
</TABLE>
See notes to financial statements.
<PAGE>
DK INVESTORS INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Note 1 - Summary of Significant Accounting Policies
The Company is registered under the Investment Company Act of 1940 as a
diversified, closed-end, management investment company. The significant
accounting policies followed by the Company are summarized as follows:
a. Security Valuation
Investments in securities were valued at the bid price by Chase Bank.
b. Federal Income Taxes
The Company qualifies under Subchapter M of the Internal Revenue Code as
a "regulated investment company" for federal income tax purposes,
investing all of its assets in tax-exempt state and local obligations.
The Company intends to distribute all of its net investment income to its
stockholders. The Company will be relieved of federal income taxes on
such income, and dividends so distributed will be tax-free to shareholders.
c. Income and Expense Recognition
Interest income and related expenses are recognized on the accrual basis.
Amortization of bond premium calculated by the straight-line method is
charged against interest income over the term of the bond.
d. Other
As is common in the industry, security transactions are accounted for on
the date the securities are purchased or sold. Dividend income and
distribution to shareholders are recorded on the ex-dividend date. Each
expense accounting for 5 per cent of total expense is separately reported.
Note 2 - Purchases and Sales of Securities
During the year ended December 31, 1999, purchases and sales of securities
other than short-term were $4,219,000 and $4,015,000, respectively.
During the year ended December 31, 1998, purchases and sales of securities
other than short-term were $4,075,000 and $4,018,000, respectively.
Note 3 - Investment Advisory Fee
The Company's agreement with Chase Bank for investment management and
advisory services calls for an annual fee of 4/10ths of 1% of the average
portfolio value. The fee for 1999 amounted to $59,294.
<PAGE>
Note 4 - Distributions
Distributions to shareholders for 1999 were $693,673 or $.5900 per share.
Distributions include $681,267 or $.5794 on account of 1999 and $12,406 or
$.0106 as a supplemental distribution for 1998. Undistributed income for
1999 is $589 or $.0005 per share.
Note 5 - Contingent Liabilities
In the opinion of management and outside counsel, there are no other
significant legal or other matters pending.
Note 6 - Supplementary Information
Per share income and capital changes
(for a share outstanding throughout the period ended):
1999 1998 1997 1996 1995
------- ------ ------- ------- -------
Investment income $ .70 $ .76 $ .80 $ .81 $ .86
Expenses .12 .14 .14 .14 .14
------- ------- ------- ------- -------
Net investment income .58 .62 .66 .67 .72
Distribution to Shareholders ( .59) ( .63) ( .66) ( .65) ( .73)
Net realized and unrealized
gain (loss) on investments ( .46) ( .07) ( .10) ( .20) .32
------- ------- ------- ------- -------
Net increase (decrease) in
asset value $( .47) $( .08) $( .10) $( .18) $ .31
======= ======= ======= ======= =======
Net assets value per share at
end of year $12.53 $12.99 $13.07 $13.17 $13.35
======= ======= ======= ======= =======
Ratio of expenses to average
net assets .94% 1.05% 1.08% 1.09% 1.06%
Ratio of net investment
income to average net assets 4.5% 4.7% 5.0% 5.1% 5.3%
Portfolio turnover 26.8% 27.0% 29.9% 16.1% 23.9%
Number of shares outstanding during the entire period was 1,175,664.
<PAGE>
DK INVESTORS, INC.
OFFICES: 205 Lexington Avenue, 16th Floor
New York, New York 10016
(212) 779-4233
OFFICERS: Gene Nadler President
Andrew Brucker, Esq. Vice President
Harry Nadler Secretary
DIRECTORS: Gene Nadler Chairman
Harry Nadler
Thomas B. Schulhof
Angelo J. Balafas
Joseph Kell
Andrew Brucker, Esq.
Francine Yellon
LEGAL COUNSEL: POMERANZ GOTTLIEB & MUSHKIN, LLC
205 Lexington Avenue, 16th Floor
New York, New York 10016
AUDITORS: CUMMINGS & CARROLL, P.C.
175 Great Neck Road
Great Neck, New York 11021
INVESTMENT
ADVISORS: Chase Asset Management, Inc.
Division of Chase Manhattan Bank
1211 Avenue of the Americas
New York, New York 10036
TRANSFER AGENT
AND REGISTRAR: American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor
New York, New York 10005
CUSTODIAN: Chase Manhattan Bank (formerly Chemical Bank)
ANNUAL MEETING:
On May 10, 2000, a regular Annual Meeting of the Shareholders of the
company will be held at 205 Lexington Avenue, 16th Floor, New York,
New York.
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AS A DIVERSIFIED,
CLOSED END MANAGEMENT COMPANY. COPIES OF THE COMPANY'S ANNUAL REPORT
FORM N-2 ARE AVAILABLE TO REGISTERED STOCKHOLDERS UPON WRITTEN
REQUEST TO THE SECRETARY AT THE ABOVE ADDRESS.
