<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA
DAILY TAX FREE 600 FIFTH AVENUE, NEW YORK, NY 10020
INCOME FUND, INC. 212-830-5200
================================================================================
Dear Shareholder:
We are pleased to present the annual report of California Daily Tax Free Income
Fund, Inc. for the year ended December 31, 1999.
The Fund had net assets of $440,494,257 and 881 active shareholders as of
December 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
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (7.59%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 California State RAN - Series 1999 06/30/00 3.49% $ 1,002,077 MIG-1 SP-1+
1,800,000 California State Veterans - Series BJ 06/01/00 4.00 1,800,000 VMIG-1 A1+
4,570,000 City of Placentia, Orange County, CA TRAN - Series 1998 (c) 06/30/00 3.13 4,571,501
2,500,000 County of Merced, CA TRAN - Series 1999-2000 06/30/00 3.37 2,506,731 SP-1+
4,000,000 Davis Joint Unified School District TRAN - Series 1999-2000 06/30/00 3.37 4,001,314 SP-1+
5,500,000 Metropolitan Water District, Water RB - Series 1999 06/01/00 3.65 5,500,000 VMIG-1
5,000,000 Sacramento City Unified School District TRAN 12/06/00 3.80 5,022,896 SP-1+
2,500,000 San Luis, CA Coastal Unified School District TRAN - Series 1999 07/14/00 3.39 2,510,192 SP-1+
2,500,000 Ventura County, CA Oxnard School District TRAN - Series 1999 07/27/00 3.35 2,511,556 SP-1+
4,000,000 Ventura County, CA TRAN - Series 1999 07/06/00 3.21 4,015,658 MIG-1 SP-1+
------------ ------------
33,370,000 Total Other Tax Exempt Investments 33,441,925
------------ ------------
<CAPTION>
Other Variable Rate Demand Instruments (b) (73.36%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 10,000,000 Alameda - Contra Costa, CA School District
Insured by AMBAC Indemnity Corp. 11/01/14 4.65% $ 10,000,000 A1+
6,300,000 Anaheim, CA COPS (1993 Refunding Projects)
Insured by AMBAC Indemnity Corp. 08/01/19 4.85 6,300,000 VMIG-1 A1+
3,000,000 California Association for Bay Area Government
LOC Banque Nationale de Paris 10/01/27 4.55 3,000,000 A1
15,300,000 California EDFA (California Independent System)
LOC Bank of America 04/01/08 5.10 15,300,000 VMIG-1 A1+
3,500,000 California EDFA (Fricke-Parks Press, Inc. Project)
LOC US Bank, N.A. 05/01/23 5.25 3,500,000 A1
1,500,000 California EDFA IDRB
(Kuhnash Properties/Arkay Plastics Project) (c)
LOC PNC Bank, N.A. 04/01/17 5.35 1,500,000
3,000,000 California Health Facility Finance Authority
(Adventist Health System)
Insured by MBIA Insurance Co. 09/01/28 4.25 3,000,000 VMIG-1 A1+
1,200,000 California Health Facility Finance Authority
(Insured Hospital - Adventist)
Insured by MBIA Insurance Co. 09/01/15 4.25 1,200,000 VMIG-1 A1+
1,590,000 California HEFA RB (St. Joseph Health System) 07/01/13 4.20 1,590,000 VMIG-1 A1+
9,100,000 California HFA (Southern California Health)
Insured by MBIA Insurance Co. 10/01/22 4.95 9,100,000 VMIG-1 A1+
1,400,000 California PCFA ( Exxon Project ) - Series 1989 12/01/12 4.30 1,400,000 P1 A1+
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 800,000 California PCFA (Pacific Gas & Electric)
LOC Bank of America 11/01/26 4.40% $ 800,000 A1+
2,500,000 California PCFA (Pacific Gas & Electric) - Series A
LOC Toronto Dominion Bank 12/01/18 4.25 2,500,000 A1+
2,000,000 California PCFA (Pacific Gas & Electric) - Series F
LOC Banque Nationale de Paris 11/01/26 4.25 2,000,000 A1+
3,400,000 California PCFA (Pacific Gas & Electric) - Series F
LOC Deutsche Bank 11/01/26 4.45 3,400,000 A1+
5,100,000 California PCFA Solid Waste Disposal
(Shell Oil Company Martinez) 12/01/24 4.10 5,100,000 VMIG-1 A1+
3,300,000 California PCFA Solid Waste Disposal
(Shell Oil Company Martinez) 10/01/31 4.40 3,300,000 VMIG-1 A1+
1,600,000 California PCFA (Southern California Edison) - Series B 02/28/08 4.10 1,600,000 VMIG-1 A1
1,500,000 California PCRB (Pacific Gas & Electric)
LOC Rabobank Nederland 12/01/16 4.40 1,500,000 A1+
8,500,000 California PCRB (Pacific Gas & Electric)
LOC Morgan Guaranty Trust Company 11/01/26 4.05 8,500,000 A1+
3,300,000 California PCRB (Pacific Gas & Electric) - Series C
LOC Kredietbank 11/01/26 4.30 3,300,000 A1+
2,000,000 California State Economic Development
(Standard Abrasives Manufacturing Project)
LOC Mellon Bank 03/01/23 5.25 2,000,000 A1+
4,300,000 California Statewide Communities Development
(House Ear Institute)
LOC Morgan Guaranty Trust Company 12/01/18 4.25 4,300,000 A1+
2,000,000 California Statewide Communities Development
(Karcher Properties)
LOC Bayerische HypoVereins Bank, A.G. 12/01/19 4.85 2,000,000 VMIG-1
2,000,000 California Statewide Communities Development
(Kimberly Woods) - Series B
Guaranteed by Federal National Mortgage Association 06/15/25 5.05 2,000,000 A1+
500,000 California Statewide Communities Development
(North California Retired Officers)
LOC Dresdner Bank 06/01/26 4.35 500,000 VMIG-1
1,200,000 Carlsbad, CA MHRB (La Costa Apartments Project) - Series A
LOC Bank of America 06/01/11 5.05 1,200,000 VMIG-1
1,500,000 Colton, CA Redevelopment Agency 1985 Issue - Series A
Guaranteed by Federal Home Loan Bank 05/01/10 4.40 1,500,000 A1+
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,200,000 Contra Costa County, CA MHRB
(Riverside Apartments Project) - Series 1992
Guaranteed by Federal National Mortgage Association 11/15/22 4.90% $ 6,200,000 A1+
1,675,000 County of Santa Clara, CA MHRB
(Grove Garden Apartments) - Series 1997A
Guaranteed by Federal National Mortgage Association 02/15/27 4.90 1,675,000 A1+
1,000,000 Freemont, CA COPS (Family Resource Center Finance Project)
LOC Kredietbank 08/01/28 4.70 1,000,000 A1+
2,910,000 Freemont, CA MHRB (Mission Wells Project) - Series 1985 E
LOC Bayerische Landesbank Girozentrale 09/01/14 5.00 2,910,000 A1+
10,225,000 Fresno, CA MHRB (Heron Pointe Apartments)
LOC Wells Fargo Bank, N.A. 06/01/07 4.90 10,225,000 VMIG-1
1,400,000 Fullerton, CA IDA RB (PCL Packaging Inc. Project) - Series 1984
LOC Bank of Nova Scotia 12/01/04 4.70 1,400,000 A1+
6,000,000 Hayward, CA MHRB (Barrington Hills) - Series A
Guaranteed by Federal National Mortgage Association 06/15/25 4.90 6,000,000 A1+
4,000,000 Hemet, CA (Mercury Savings & Loans/Sun)
Guaranteed by Federal Home Loan Mortgage Corp. 01/01/25 4.90 4,000,000 A1+
1,000,000 Irwindale, CA IDRB (TOYS R'US, Inc. Project) - Series 1984 (c)
LOC Bankers Trust Company 12/01/19 5.12 1,000,000
1,800,000 Irvine, CA Public Facility (Infrastructure Authority Lease Capital)
LOC Bayerische HypoVereins Bank, A.G. 11/01/10 5.10 1,800,000 VMIG-1
2,000,000 Irvine, CA Capital Improvement Bond Act 1915 Assessment District #97-17
LOC Bayerische Landesbank Girozentrale 09/02/23 4.20 2,000,000 VMIG-1
1,000,000 Irvine Ranch, CA Water District
LOC Landesbank Hessen 10/01/09 4.00 1,000,000 A1+
1,000,000 Irvine Ranch, CA Water District #'s 105,140, 240 & 25
LOC Commerzbank 01/01/21 4.30 1,000,000 VMIG-1 A1+
1,000,000 Irvine Ranch, CA Water District
LOC Toronto Dominion Bank 06/01/15 4.00 1,000,000 VMIG-1 A1+
1,000,000 Kings County, CA MHRB
(Edgewater Isle Apartments) - Series 1996A
LOC Wells Fargo Bank, N.A. 06/01/07 4.85 1,000,000 VMIG-1
1,965,000 Los Angeles, CA IDRB
(Cereal Food Processors, Inc. Project) - Series 1995
LOC Commerce Bank 12/01/05 5.65 1,965,000 A1
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,100,000 Los Angeles, CA Regional Improvement Authority
(Los Angeles International Airport)
LOC Wachovia Bank, N.A. 12/01/24 4.80% $ 2,100,000 P1
1,480,000 Los Angeles, CA MHRB
Guaranteed by Federal Home Loan Bank 12/01/10 3.90 1,480,000 A1+
1,500,000 Los Angeles, CA Housing Authority MHRB
(Malibu Meadows Project) - Series 1998B
Guaranteed by Federal National Mortgage Association 04/15/28 4.90 1,500,000 A1+
7,000,000 Los Angeles, CA Community Redevelopment Agency MHRB
(Academy Village Apartments) - Series A
LOC Union Bank of Switzerland 10/01/19 5.00 7,000,000 VMIG-1
3,000,000 Los Angeles, CA HFA MHRB
(Sand Canyon Ranch Project) - Series 1985F
LOC Citibank, N.A. 11/01/06 4.75 3,000,000 A1+
2,500,000 Los Angeles, CA IDA (P&C Poultry Distributors) (c)
LOC Comerica Bank 06/01/23 5.65 2,500,000
2,500,000 Metropolitan Water District RB (Waterworks) - Series B 07/01/28 3.65 2,500,000 VMIG-1 A1+
16,000,000 M-S-R Public Power Agency, CA (San Juan Project)
Insured by MBIA Insurance Corp. 07/01/18 4.35 16,000,000 VMIG-1 A1+
7,000,000 M-S-R Public Power Agency, CA (San Juan Project)
Insured by MBIA Insurance Corp. 07/01/22 4.35 7,000,000 VMIG1 A1+
6,700,000 Oakland, CA Joint Powers Financing Authority
(Lease Revenues) - Series A-1
Insured by FSA 08/01/21 5.00 6,700,000 VMIG-1 A1+
2,400,000 Ontario, CA Revenue Refunding Bonds
Redevelopment Agency - Series A 09/01/27 4.85 2,400,000 A1+
3,300,000 Orange County, CA (Irvine Coast Assesment District)
LOC Kredietbank/Societe Generale 09/02/18 4.25 3,300,000 VMIG-1 A1+
25,500,000 Orange County, CA Lakes Project
(Apartments Development) - Series A
Guaranteed by Federal Home Loan Mortgage Corp. 12/01/06 4.90 25,500,000 A1+
1,000,000 Orange County, CA (Radnor/Aragon Corporation)
LOC Toronto Dominion Bank 08/01/19 5.12 1,000,000 P1
3,000,000 Orange County, CA Sanitation District COPS
LOC National Westminster PLC 08/01/15 4.20 3,000,000 VMIG-1 A1+
9,650,000 Orange County, CA Sanitation District COPS
Insured by FGIC 08/01/17 4.25 9,650,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,500,000 Otay, CA Water District COPS - Series 1996
LOC Landesbank Hessen 09/01/26 5.15% $ 2,500,000 VMIG-1 A1+
305,000 Oxnard, CA (Channel Island Business Center Project) - Series 1985
LOC Wells Fargo Bank, N.A. 07/01/05 4.25 305,000 VMIG-1
2,000,000 Riverside County, CA Housing Authority
(Amanda Park Apartment Project)
Guaranteed by Federal Home Loan Mortgage Corp. 01/15/29 5.05 2,000,000 VMIG-1
2,250,000 Riverside County, CA IDA
LOC Union Bank of California 05/01/24 4.90 2,250,000 P1
5,500,000 Riverside County, CA (Riverside County Public Facility)
LOC Commerzbank/National Westminster PLC 12/01/15 5.00 5,500,000 VMIG-1
4,500,000 Rohnert Park, CA MHRB
(Crossbrook Apartments Project) - Series 1995A
Guaranteed by Federal National Mortgage Association 06/15/25 4.90 4,500,000 A1+
8,500,000 Sacramento County, CA MHRB
(Shadowood Apartments Project) - Series 1992A
LOC General Electric Capital Corporation 12/01/22 5.15 8,500,000 A1+
2,480,000 Salinas, CA MHRB (Brentwood Gardens) - Series A
Guaranteed by Federal National Mortgage Association 05/15/27 4.90 2,480,000 A1+
1,800,000 San Bernadino County, CA COPS
(County Center Refinancing Project) - Series 1996
LOC Canadian Imperial Bank of Commerce 07/01/15 4.90 1,800,000 VMIG-1 A1+
5,220,000 San Bernadino County, CA MHRB (Parkview Place) - Series A
Guaranteed by Federal Home Loan Bank 03/01/27 4.90 5,220,000 A1+
1,200,000 San Diego, CA IDRB (Kaiser Aerospace & Electric)
LOC ABN AMRO Bank 10/01/07 5.40 1,200,000 P1
2,000,000 San Diego, CA MHRB (University Town Center Apartment)
LOC Bank of America 10/01/15 4.30 2,000,000 VMIG-1
1,900,000 San Franciso, CA (Filmore Center A-1)
LOC Credit Suisse First Boston 12/01/17 4.95 1,900,000 A1+
4,000,000 San Franciso, CA MHRB (City Hights Apartments)
Guaranteed by Federal National Mortgage Association 06/15/25 5.05 4,000,000 A1+
1,500,000 San Jose, CA MHRB
(Siena at Renaissance Square Apartments) - Series 1996A
LOC Landesbank Hessen 12/01/29 5.10 1,500,000 VMIG-1
1,700,000 Santa Ana, CA Health Facility
LOC Banque Nationale de Paris 10/01/20 4.25 1,700,000 A1
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (b) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 Santa Clara, CA Transit District - Series 1985A
Insured by AMBAC Indemnity Corp. 06/01/15 4.65% $ 3,000,000 AAA
2,100,000 Southeast California Resource Recovery Facility Authority
Lease Revenue Refunding Bonds - Series 1995A
LOC Bayerische Landesbank Girozentrale 12/01/18 5.00 2,100,000 VMIG-1 A1+
2,000,000 Southern California Public Power Authority RB
(Southern Transmission Project) - Series 1996B
Insured by FSA 07/01/23 5.00 2,000,000 VMIG-1 A1+
4,800,000 Southern California Public Power Authority RB
(Public Power Transmission Project) - Series 1991
Insured by AMBAC Indemnity Corp. 07/01/19 4.85 4,800,000 VMIG-1 A1+
3,000,000 State of California GO RB
Insured by MBIA Insurance Co. 09/01/21 5.36 3,000,000 A1+
3,115,000 Town of Windsor MHRB
(Oakmount at Windsor Project) - Series A
LOC Banque Paribas 08/01/25 5.65 3,115,000 A1
2,500,000 Visalia, CA IDRB (Savannah Foods) (c)
LOC Suntrust Bank 06/01/05 5.60 2,500,000
2,100,000 Walnut Creek, CA MHRB (Creekside Drive Apartments)
LOC Bank of America 04/01/07 4.40 2,100,000 VMIG-1
11,000,000 West Basin Municipal Water District COPS
(Recycled Water Project-Phase II) - Series 1997C
LOC Bayerische HypoVereins Bank, A.G. 08/01/27 4.80 11,000,000 VMIG-1
2,000,000 West Basin Municipal Water District COPS
(Recycled Water Project-Phase III)
LOC Bayerische HypoVereins Bank, A.G. 08/01/29 4.80 2,000,000 VMIG-1 A1+
------------ ------------
323,165,000 Total Other Variable Rate Demand Instruments 323,165,000
------------ ------------
<CAPTION>
Put Bonds (d) (3.04%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 455,000 California HFA Single Family Variable Rate Bonds II - Series 1998B 02/01/00 4.95% $ 455,000 MIG-1 SP-1+
1,655,000 California Housing Mortgage Bonds
(Single Family Mortgage Bonds) 08/01/00 3.40 1,655,000 VMIG1 SP-1+
3,745,000 California PCFA PCRB (Chevron USA Incorporated Project) (c) 11/15/00 3.80 3,745,000
1,000,000 Los Angeles, CA State Building Authority Lease 10/01/00 3.43 1,003,603 A1
4,000,000 San Luis, CA Coastal Unified School District (San Luis Obispo) 06/30/00 3.33 4,016,458 SP-1+
2,500,000 South Coast Local Education Agency TRAN
Insured by MBIA Insurance Co. 06/30/00 3.29 2,507,798 MIG-1
------------ ------------
13,355,000 Total Put Bonds 13,382,859
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Commercial Paper (13.79%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,600,000 California PCR (Southern California Edison) - Series 85C 02/11/00 3.40% $ 1,600,000 P1 A1
4,000,000 California PCR (Southern California Edison) - Series B 04/12/00 3.45 4,000,000 P1 A1
1,500,000 Chula Vista, CA (San Diego Gas & Electric) 02/10/00 3.70 1,500,000 P1 A1
3,000,000 Long Beach, CA Harbor Department - Series A 04/05/00 3.55 3,000,000 P1 A1+
3,000,000 Los Angeles, CA (Department of Water & Power)
LOC Bank of America/Bayerische Landesbank Girozentrale/
Credit Locale de France/Morgan Guaranty Trust Company/
Westdeutsche Landesbank 02/23/00 3.55 3,000,000 P1 A1+
11,650,000 Los Angeles, CA Capital Assessment
(Corporation Lease Revenue Notes)
LOC Bayerische Landesbank Girozentrale/
Morgan Guaranty Trust Company/
Westdeutsche Landesbank 01/18/00 3.65 11,650,000 P1 A1+
8,480,000 Port of Oakland, CA - Series A
LOC Bank of Nova Scotia/Commerzbank 01/12/00 3.50 8,480,000 P1 A1+
5,000,000 Puerto Rico Government Development Bank 01/19/00 3.25 5,000,000 A1+
2,000,000 Sacremento, CA Municipal Utilities - Series I
LOC Bayerische Landesbank Girozentrale/
Morgan Guaranty Trust Company/
Westdeutsche Landesbank 01/24/00 3.50 2,000,000 A1+
1,030,000 San Francisco Airport - Series 1997
LOC Societe Generale 01/18/00 3.80 1,030,000 P1 A1+
795,000 San Francisco Airport - Series 1997
LOC Societe Generale 02/14/00 3.60 795,000 P1 A1+
1,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 01/24/00 3.50 1,000,000 P1 A1+
2,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 02/09/00 3.55 2,000,000 P1 A1+
2,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 02/15/00 3.20 2,000,000 P1 A1+
9,000,000 San Francisco Bay Area Transit
LOC Bayerische Landesbank Girozentrale 02/17/00 3.55 9,000,000 P1 A1+
1,666,000 State of California Department of Resource Water RB 02/10/00 3.65 1,666,000 P1 A1+
2,000,000 The Regents of the University of California - Series A 02/16/00 3.35 2,000,000 P1 A1+
1,000,000 The Regents of the University of California - Series A 04/12/00 3.45 1,000,000 P1 A1+
------------ ------------
60,721,000 Total Tax Exempt Commercial Paper 60,721,000
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments - Private Placements (b) (1.63%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,505,000 Gene E. Lynn Nursing Home
LOC Bank of America 12/01/15 5.48% $ 3,505,000 P1 A1+
2,285,000 Kent Trust Project - Series 84B
LOC Comerica Bank 12/01/14 4.25 2,285,000 P1 A1
1,375,000 Nob Hill Venture (City of Morgan Hill) - Series 84
LOC Wells Fargo Bank, N.A. 12/01/09 4.25 1,375,000 P1 A1
------------ ------------
7,165,000 Total Variable Rate Demand Instruments - Private Placements $ 7,165,000
------------ ------------
Total Investments (99.41%) (Cost $437,875,784+) 437,875,784
Cash and Other Assets, Net of Liabilities (0.59%) 2,618,473
------------
Net Assets (100.00%) $440,494,257
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 233,897,249 Shares Outstanding (Note 3) $ 1.00
============
Class B Shares, 206,609,161 Shares Outstanding (Note 3) $ 1.00
============
</TABLE>
+ Aggregate cost for federal income tax purposes is identical.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1999
================================================================================
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 payable on demand at par including accrued interest (usually
with seven days notice) and, if indicated, 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.
(c) Securities that are not rated which the Fund's Board of Directors has
determined to be of comparable quality to those rated securities in which
the Fund invests.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C><C>
COPS = Certificates of Participations IDRB = Industrial Development Revenue Bond
EDFA = Economic Development Finance Authority LOC = Letter of Credit
FGIC = Financial Guaranteed Insurance Company MHRB = Multi-Family Housing Revenue Bond
FSA = Financial Security Assurance PCFA = Pollution Control Finance Authority
GO = General Obligation PCRB = Pollution Control Revenue Bond
HEFA = Health & Educational Facility Authority RAN = Revenue Anticipation Note
HFA = Housing Finance Agency RB = Revenue Bond
IDA = Industrial Development Authority TRAN = Tax and Revenue Anticipation Note
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest...................................................................... $ 9,041,636
------------------
Expenses: (Note 2)
Investment management fee.................................................... 869,936
Administration fee........................................................... 608,955
Shareholder servicing fee.................................................... 450,071
Custodian expenses........................................................... 19,393
Shareholder servicing and related shareholder expenses....................... 188,853
Legal, compliance and filing fees............................................ 108,069
Audit and accounting......................................................... 66,884
Directors' fees.............................................................. 9,232
Other........................................................................ 14,239
------------------
Total expenses........................................................... 2,335,632
Less: Expenses paid indirectly (Note 2).................................. ( 138)
------------------
Net expenses............................................................. 2,335,494
------------------
Net investment income.......................................................... 6,706,142
------------------
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments......................................... 3,459
------------------
Increase in net assets from operations.......................................... $ 6,709,601
=================
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
================================================================================
<TABLE>
<CAPTION>
1999 1998
--------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income...................................... $ 6,706,142 $ 6,003,731
Net realized gain (loss) on investments.................... 3,459 -0-
--------------- ----------------
Increase in net assets from operations......................... 6,709,601 6,003,731
Dividends to shareholders from net investment income:
Class A.................................................... ( 5,011,947)* ( 5,213,015)*
Class B.................................................... ( 1,694,195)* ( 790,716)*
Capital share transactions (Note 3):
Class A.................................................... 23,967,484 27,262,242
Class B.................................................... 176,417,770 15,026,919
--------------- ----------------
Total increase (decrease).................................. 200,388,713 42,289,161
Net assets:
Beginning of year.......................................... 240,105,544 197,816,383
--------------- ----------------
End of year................................................ $ 440,494,257 $ 240,105,544
=============== ================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies.
California Daily Tax Free Income Fund, Inc. is a no-load, non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940. 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.
Distribution for Class B shares commenced on October 9, 1996 and all Fund shares
outstanding before October 9, 1996 were designated as Class A shares. The Fund
is a short-term, tax exempt money market Fund. Its 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) at the annual rate of .30%
of the Fund's average daily net assets.
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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates
(Continued).
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors, Inc. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement,
only with respect to Class A shares of the Fund. For its services under the
Shareholder Servicing Agreement, the Distributor receives from the Fund with
respect only to the Class A shares, a fee equal to .20% of the Fund's average
daily net assets. There were no additional expenses borne by the Fund pursuant
to the Distribution Plan.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$2,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $131,855 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as servicing agent for the Fund.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are expense offsets of $138.
3. Capital Stock.
At December 31, 1999, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $440,506,410. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Year Year
Class A Ended Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Sold................................... 540,104,134 453,337,599
Issued on reinvestment of dividends.... 4,354,585 3,740,509
Redeemed............................... ( 520,491,235) ( 429,815,866)
------------- -------------
Net increase (decrease)................ 23,967,484 27,262,242
============= =============
<CAPTION>
Year Year
Class B Ended Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> C> <C>
Sold................................... 442,376,314 143,875,423
Issued on reinvestment of dividends.... 1,548,953 699,564
Redeemed............................... ( 267,507,497) ( 129,548,068)
------------- -------------
Net increase (decrease)................ 176,417,770 15,026,919
============= =============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized losses at December 31, 1999 amounted to
$12,153. This amount represents tax basis capital losses which may be carried
forward to offset future capital gains. Such losses expire December 31, 2002.
5. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of California and, accordingly, is subject to the credit risk associated with
the non-performance of such issuers. Approximately 46% 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 creditworthiness 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>
- --------------------------------------------------------------------------------
================================================================================
6. Financial Highlights.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
Class A
------- 1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income........................ 0.022 0.025 0.028 0.027 0.032
Less distributions:
Dividends from net investment income......... ( 0.022) ( 0.025) ( 0.028) ( 0.027) ( 0.032)
------- ------- ------- ------- -------
Net asset value, end of year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return................................... 2.25% 2.48% 2.84% 2.76% 3.28%
Ratios/Supplemental Data
Net assets, end of year (000).................. $233,890 $209,916 $182,653 $205,947 $171,808
Ratios to average net assets:
Expenses net of fees waived.................. 0.86% 0.88% 0.82% 0.75% 0.67%
Net investment income........................ 2.23% 2.43% 2.80% 2.73% 3.24%
Management, administration and shareholder
servicing fees waived..................... 0.00% 0.01% 0.05% 0.08% 0.22%
Expense offsets.............................. 0.00% 0.00% 0.00% 0.01% 0.01%
<CAPTION>
Year Ended
Class B December 31, October 9, 1996
------- -------------------------------------- (Commencement of Sales) to
1999 1998 1997 December 31, 1996
-------- -------- -------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from investment operations:
Net investment income........................ 0.025 0.027 0.030 0.004
Less distributions:
Dividends from net investment income......... ( 0.025) ( 0.027) ( 0.030) ( 0.004)
-------- -------- -------- --------
Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Return................................... 2.49% 2.76% 3.08% 3.08%*
Ratios/Supplemental Data
Net assets, end of period (000)................ $ 206,604 $ 30,190 $ 15,163 $ 3,436
Ratios to average net assets:
Expenses net of fees waived.................. 0.62% 0.60% 0.58% 0.56%*
Net investment income........................ 2.61% 2.72% 3.10% 3.09%*
Management administration fees waived........ 0.00% 0.01% 0.05% 0.06%*
Expense offsets.............................. 0.00% 0.00% 0.00% 0.01%*
* Annualized
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To The Board of Directors and Shareholders
California Daily Tax Free 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
California Daily Tax Free Income Fund, Inc. (the "Fund") at December 31, 1999,
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 December 31, 1999 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above. The financial statements for the year ended December 31, 1998,
including the financial highlights for each of the periods prior to December 31,
1999 were audited by other independent accountants whose report dated January
29, 1999 expressed an unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, NY
January 28, 2000
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA DAILY TAX FREE 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 joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the most recent two fiscal years 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.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA
DAILY
TAX FREE
INCOME
FUND, INC.
Annual Report
December 31, 1999
- --------------------------------------------------------------------------------
<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.
- ------------------------------------------------------
California Daily Tax Free 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
CAL1299A
- --------------------------------------------------------------------------------
<PAGE>
