As filed with the Securities and Exchange Commission on November 8, 2007
Investment Company Act File number 811-8654
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
FLORIDA DAILY MUNICIPAL INCOME FUND
(Exact name of registrant as specified in charter)
600 FIFTH AVENUE
NEW YORK, NY 10020
(Address of principal executive offices) (Zip code)
CHRISTINE MANNA
C/O REICH & TANG ASSET MANAGEMENT, LLC
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-830-5200
Date of fiscal year end: August 31
Date of reporting period: August 31, 2007
ITEM 1: REPORT TO STOCKHOLDERS
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FLORIDA 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
DAILY MUNICIPAL (212) 830-5200
INCOME FUND
================================================================================
Dear Shareholder:
We are pleased to present the annual report of Florida Daily Municipal Income
Fund (the "Fund") for the year ended August 31, 2007.
The Fund had net assets of $75,551,060 as of August 31, 2007.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
/s/ Steven W Duff
Steven W. Duff
President
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FLORIDA DAILY MUNICIPAL INCOME FUND
EXPENSE CHART
FOR SIX MONTHS ENDED AUGUST 31,2007
(UNAUDITED)
================================================================================
As a shareholder of the Fund, you incur the following ongoing costs: management
fees and other Fund expenses. You may also incur distribution and/or service
(12b-1) fees. This example is intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period March 1, 2007 through August 31, 2007.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees that you may incur in other
mutual funds. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.
------------------------------------------------------------------------------------------------------------------------------------
Beginning Account Ending Account Expenses Paid Annualized
Class A Value 03/01/07 Value 08/31/07 During the period * Expense Ratio
------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,013.90 $5.08 1.00%
------------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00%
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Beginning Account Ending Account Expenses Paid Annualized
Class B Value 03/01/07 Value 08/31/07 During the period * Expense Ratio
------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,015.30 $3.73 0.74%
------------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,021.53 $3.75 0.74%
------------------------------------------------------------------------------------------------------------------------------------
<FN>
* Expenses are equal to the Fund's annualized expense ratios multiplied by the
average account value over the period (March 1, 2007 through August 31, 2007),
multiplied by 184/365 (to reflect the six month period).
</FN>
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================================================================================
Ratings (a)
---------------
Face Maturity Current Value Standard
Amount Date Coupon (b) (Note 1) Moody's & Poor's
------ ---- --------- -------- ------- -------
Put Bond (c) (3.47%)
------------------------------------------------------------------------------------------------------------------------------------
$ 2,620,000 Orange County,FL IDA (Orlando-Hawaiian Motel Co.)-Series 1985
LOC US Bank, N.A. 10/01/07 4.15% $ 2,620,000 P-1 A-1+
------------ ------------
2,620,000 Total Put Bond 2,620,000
------------ ------------
Tax Exempt Commercial Paper (20.91%)
-----------------------------------------------------------------------------------------------------------------------------------=
$ 2,000,000 Hillsborough County,FL Aviation Authority Airport Facilities-SeriesB
LOC Landesbank Baden Wurtemburg 10/04/07 3.75% $ 2,000,000 P-1 A-1+
3,100,000 Hillsborough County, FL Capital Improvement Program
LOC State Street Bank & Trust Company 09/20/07 3.70 3,100,000 P-1 A-1+
3,000,000 Jacksonville, FL Electric Authority (Electric System)-Series 2000A 12/13/07 3.66 3,000,000 VMIG-1 A-1+
2,000,000 Jacksonville, FL HEFA HRB
(Baptist Medical Center Project) - Series 2003B
LOC Bank of America, N.A. 09/07/07 3.70 2,000,000 P-1 A-1+
2,700,000 Palm Beach County, FL Health Facilities Authority
(Pooled Hospital Loan Program) - Series 1985
LOC SunTrust Bank 10/18/07 3.72 2,700,000 VMIG-1 A-1+
1,500,000 Palm Beach County, FL School District
LOC Bank of America, N.A. 03/13/08 3.65 1,500,000 VMIG-1 A-1+
1,500,000 Sunshine State Service Florida Government Finance
Committee - Series F 11/14/07 3.70 1,500,000 P-1 A-1+
------------ -----------
15,800,000 Total Tax Exempt Commercial Paper 15,800,000
------------ -----------
Tax Exempt General Obligation Notes & Bonds (2.65%)
------------------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Neshaminy, PA School District TRAN (d) 06/30/08 3.90% $ 2,003,972
------------ -----------
2,000,000 Total Tax Exempt General Obligation Notes & Bonds 2,003,972
------------ -----------
Variable Rate Demand Instruments (e) (77.61%)
------------------------------------------------------------------------------------------------------------------------------------
$ 3,210,000 Alachua County, FL HFA RB Continuing Care Retirement Community
(Oak Hammock at the University of Florida Project) - Series 2002A
LOC BNP Paribas 10/01/32 3.98% $ 3,210,000 VMIG-1
2,200,000 Alachua County, FL HFA Multifamily RB
(Santa Fe I Apartments Project)
LOC Citibank, N.A. 12/15/38 4.05 2,200,000 A-1+
1,900,000 Branch Banking & Trust Municipal Floater Certificates - Series 1002
LOC Branch Banking & Trust Company 11/06/23 4.13 1,900,000 VMIG-1
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<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</Table>
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FLORIDA DAILY MUNICIPAL INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31,2007
================================================================================
Ratings (a)
---------------
Face Maturity Current Value Standard
Amount Date Coupon (b) (Note 1) Moody's & Poor's
------ ---- --------- -------- ------- -------
Variable Rate Demand Instruments (e) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
$ 2,800,000 Broward County, FL HFA Multifamily Housing RB
(Palms of Deerfield Beach)
LOC Citibank, N.A. 08/15/38 4.05% $ 2,800,000 A-1+
700,000 City of Pulaski and Giles County, TN IDRB
(Martin Methodist College Project) - Series 2004
LOC Amsouth Bank 01/01/24 4.00 700,000 VMIG-1
1,300,000 Duval County, Florida HFA
(Sunbeam Road Apartments Project) - Series 1997
LOC US Bank, N.A. 07/01/25 3.97 1,300,000 A-1+
1,900,000 Florida Captial Trust Agency Air Cargo RB (Aero Miami FX Project)
LOC JPMorgan Chase Bank, N.A. 08/01/34 4.01 1,900,000 A-1+
1,200,000 Florida Development Finance Corporation IDRB
(Enterprise Bond Press Project) - Series B
LOC Branch Banking & Trust Company 07/01/17 4.05 1,200,000 P-1 A-1+
900,000 Florida Housing Finance Corporation Housing RB
(Heron Park Project) - Series 1996U
Guaranteed by Federal National Mortgage Association 12/01/29 3.95 900,000 VMIG-1
3,500,000 Florida Housing Finance Corporation MHRB
(Island Club Apartments Project) - Series A
Guaranteed by Federal Home Loan Mortgage Corp. 07/01/31 3.94 3,500,000 A-1+
900,000 Florida Housing Finance Corporation Housing RB
(Timberline Apartments) - Series 1999P
Collateralized by Federal National Mortgage Association 10/15/32 4.10 900,000 A-1+
1,000,000 Fulton County, KY Industrial Building RB
(The Burke-Parsons-Bowlby Corporation Project) - Series 2006
LOC Branch Banking & Trust Company 07/01/26 4.08 1,000,000 P-1 A-1+
2,000,000 Gainesville, FL Combined Utility Enterprise
Utilities System RB - 2007 - Series A 10/01/36 3.95 2,000,000 VMIG-1 A-1+
60,000 Gulf Breeze, FL Local Government Finance Authority RB - Series 1985C
Insured by FGIC 12/01/15 3.97 60,000 VMIG-1 A-1+
2,000,000 Illinois Finance Authority
(Pollman North America, Inc. Project) - Series 2005D
LOC Fifth Third Bank 12/01/25 4.08 2,000,000 P-1 A-1+
3,200,000 Jacksonville, FL Economic Development Commission Special Facilities
Airport RB (Holland Sheltair Aviation Group Project) - Series 2005-B1
LOC Mellon Bank N.A. 05/01/35 4.05 3,200,000 A-1+
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The accompanying notes are an integral part of these financial statements
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================================================================================
Ratings (a)
---------------
Face Maturity Current Value Standard
Amount Date Coupon (b) (Note 1) Moody's & Poor's
------ ---- --------- -------- ------- -------
Variable Rate Demand Instruments (e) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
$ 1,000,000 Jacksonville, FL JEA Electronic System Subordinated RB
(Financing for a New Generation Project) - Series 2001B 10/01/30 3.96% $ 1,000,000 VMIG-1 A-1
2,000,000 Lehman Municipal Trust Receipts relating to Florida Housing
Finance Corporation Homeowner Mortgage RB 2007 Series 3
LOC Government National Mortgage Association/Federal National
Mortgage Association/Federal Home Loan Mortgage Corp. 01/01/48 4.33 2,000,000 VMIG-
1,025,000 Marion County, FL IDA
(Hamilton Products, Inc. Project) - Series 1995
LOC Comerica Bank 11/01/15 4.11 1,025,000 P-1 A-1
800,000 Marion County, FL IDA RB
(Capris Furniture Industries Project) - Series 2005
LOC SunTrust Bank 02/01/25 4.17 800,000 P-1 A-1+
2,000,000 Miami-Dade County, FL IDA IDRB
(Airbus Service Company, Inc. Project) - Series 1998A
LOC Calyon 04/01/30 4.07 2,000,000 A-1+
2,000,000 Miami-Dade County, FL IDA
(Avborne Heavy Maintenance, Inc.) - Series 1998
LOC JPMorgan Chase Bank, N.A. 08/01/18 4.03 2,000,000 A-1+
1,000,000 Nevada Housing Division MHRB
(Southwest Village Apartments) - Series 2005
Guaranteed by Federal National Mortgage Association 10/15/38 4.00 1,000,000 A-1+
1,000,000 Ocean Highway and Port Authority, FL RB
(Port, Airport, Marina Improvement) - Series 1990A
LOC Wachovia Bank, N.A. 12/01/20 4.10 1,000,000 VMIG-1 A-1+
1,400,000 Ocean Highway and Port Authority, FL RB
(Port, Airport, Marina Improvement) - Series 1990C
LOC Wachovia Bank, N.A. 12/01/20 4.10 1,400,000 VMIG-1 A-1+
4,500,000 Palm Beach County, FL RB (Raymond F. Kravis Center for
Performing Arts Inc Project) - Series 2002
LOC Northern Trust Company 07/01/32 3.95 4,500,000 VMIG-1
1,960,000 PUTTERS - Series 1086 (Miami-Dade County, FL Storm Water
Utility RB - Series 2004)
Insured by MBIA Insurance Corp. 04/01/13 4.03 1,960,000 VMIG-1
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31,2007
================================================================================
---------------
Face Maturity Current Value Standard
Amount Date Coupon (b) (Note 1) Moody's & Poor's
------ ---- --------- -------- ------- -------
Variable Rate Demand Instruments (e) (Continued)
------------------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Sarasota County, FL Continuing Care Retirement Community
Revenue Refunding RB (Glenridge on Palmer Ranch Project)
LOC Bank of Scotland 06/01/36 3.98% $ 2,000,000 VMIG-1
2,100,000 Societe Generale Municipal Trust Receipts
Miami-Dade County, FL Aviation RB - Series 2000B
(Miami International Airport)
Insured by FGIC 10/01/29 4.00 2,100,000 A-1+
1,700,000 St. Lucie County, FL IDRB
(Freedom Plastics, Inc. - Florida Project) - Series 2000
LOC LaSalle Bank, N.A. 11/01/20 4.02 1,700,000 A-1
2,200,000 Tallahassee, FL IDRB
(Rose Printing Company, Inc. Project) - Series 2000A
LOC Branch Bank & Trust Company 10/01/15 4.08 2,200,000 VMIG-1
2,680,000 Tampa, FL Student Housing RB (CHF-Tampa, LLC Project)
- Series 2005A
LOC Royal Bank of Canada 10/01/37 3.98 2,680,000 VMIG-1 A-1+
500,000 TOCs Trust - Series 2000-1 (Puerto Rico Infrastructure Financing
Authority Special Obligation Bonds, 2000 - Series A)
Collateralized by The State and Local Government Series Securities 04/01/27 3.96 500,000 A-1+
----------- -------------
58,635,000 Total Variable Rate Demand Instruments 58,635,000
----------- ------------
Total Investments (104.64%) (Cost $79,058,972+) 79,058,972
Liabilities in excess of cash and other assets (-4.64%) (3,507,912)
------------
Net Assets (100%) $ 75,551,060
============
+ Aggregate cost for federal income tax purposes is identical.
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The accompanying notes are an integral part of these financial statements
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================================================================================
FOOTNOTES:
(a) Variable rate demand instruments are not assigned their own ratings; the
ratings are those 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. Ratings are
unaudited.
In addition, certain issuers may have 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) The interest rate shown reflects the security's current coupon, unless yield
is available.
(c) The maturity date indicated is the next put date.
(d) Securities that are not rated which the Fund's adviser has determined to be
of comparable quality to those rated securities in which the Fund invests.
(e) 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.
KEY:
FGIC = Financial Guaranty Insurance Company IDRB = Industrial Development Revenue Bond
HEFA = Health and Education Facilities Authority LOC = Letter of Credit
HFA = Housing Finance Agency MHRB = Multi-Family Housing Revenue Bond
HRB = Hospital Revenue Bond RB = Revenue Bond
IDA = Industrial Development Authority TOCs = Tender Option Certificates
TRAN = Tax and Revenue Anticipation Note
BREAKDOWN OF PORTFOLIO BY STATE:
--------------------------------------------------------------------------------
States Value % of Portfolio
--------------------------------------------------------------------------------
Florida $ 69,955,000 88.49%
Illinois 2,000,000 2.53
Kentucky 1,000,000 1.26
Nevada 1,000,000 1.26
Pennsylvania 2,003,972 2.54
Puerto Rico 500,000 0.63
Tennessee 700,000 0.89
Other Territories 1,900,000 2.40
--------------------------------------------------------------------------------
Total $ 79,058,972 100.00%
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The accompanying notes are an integral part of these financial statements
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,2007
================================================================================
ASSETS
Investments in securities, at amortized cost (Note 1)......................... $ 79,058,972
Accrued interest receivable................................................... 363,118
Prepaid Expenses.............................................................. 4,514
Other receivables............................................................. 1,815
------------------
Total assets............................................................ 79,428,419
------------------
LIABILITIES
Payable to affiliates*........................................................ 33,874
Due to custodian.............................................................. 3,678,573
Accrued expenses.............................................................. 87,634
Dividends payable............................................................. 77,278
------------------
Total liabilities....................................................... 3,877,359
------------------
Net assets.................................................................... $ 75,551,060
==================
SOURCE OF NET ASSETS:
Net capital paid in onshares of beneficial interest(Note 4)................... $ 75,551,060
------------------
Net assets.................................................................... $ 75,551,060
==================
Net asset value, per share (Note 4):
Class Name Net Assets Shares Outstanding Net Asset Value
----------- ----------- ------------------ ---------------
Class A Shares............................... $38,711,751 38,711,751 $1.00
Class B Shares............................... $36,839,309 36,839,309 $1.00
* Includes fees payable to Reich & Tang Asset Management, LLC, Reich & Tang
Distributors, Inc. and Reich & Tang Services, Inc.
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The accompanying notes are an integral part of these financial statements
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 2007
================================================================================
INVESTMENT INCOME
Income:
Interest...................................................................... $ 2,940,156
-----------------
Expenses: (Note 2)
Investment management fee..................................................... 320,540
Administration fee............................................................ 168,283
Shareholder servicing fee (Class A shares).................................... 116,748
Custodian expenses............................................................ 8,340
Shareholder servicing and related shareholder expenses+....................... 71,211
Legal, compliance and filing fees............................................. 53,236
Audit and accounting.......................................................... 97,492
Trustees' fees and expenses................................................... 10,497
Miscellaneous................................................................. 6,305
-----------------
Total expenses................................................................ 852,652
Less: Fees waived............................................................. (135,790)
Expenses paid indirectly........................................ (3,398)
-----------------
Net expenses.................................................................. 713,464
-----------------
Net investment income......................................................... 2,226,692
REALIZED GAIN (LOSS) ON INVESTMENTS.............................................
Net realized gain on investments.............................................. -0-
-----------------
Increase in net assets from operations......................................... $ 2,226,692
=================
+ Includes class specific transfer agency expenses of $30,067 and $16,638 for
Class A and Class B shares, respectively.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED AUGUST 31, 2007 and 2006
================================================================================
2007 2006
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income......................................................... $ 2,226,692 $ 2,830,122
Net realized gain (loss) on investments....................................... -0- -0-
---------------- ---------------
Increase in net assets from operations.......................................... 2,226,692 2,830,122
Dividends to shareholders from net investment income*:
Class A....................................................................... (1,245,135) (1,610,674)
Class B....................................................................... (981,557) (1,219,448)
---------------- --------------
Total dividend to shareholders................................................ (2,226,692) (2,830,122)
Transactions in shares of beneficial interest (Note 4):
Class A....................................................................... (44,887,662) 10,624,325
Class B....................................................................... (12,710,166) 5,393,371
---------------- --------------
Total capital share transactions (57,597,828) 16,017,696
---------------- --------------
Total increase (decrease) (57,597,828) 16,017,696
Net assets:
Beginning of year............................................................. 133,148,888 117,131,192
--------------- -----------------
End of year................................................................... $ 75,551,060 $ 133,148,888
=============== =================
Undistributed net investment income $ -0- $ -0-
=============== =================
* 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
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIALS STATEMENTS
================================================================================
1. Summary of Accounting Policies
Florida Daily Municipal Income Fund, a Massachusetts Business Trust, is a
no-load, non-diversified, open-end management investment company registered
under the Investment Company Act of 1940. The 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 Fund's
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. Income,
expenses (other than expenses attributable to a specific class), and realized
and unrealized gains or losses on investments are allocated to each class of
shares based on its relative net assets.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America for investment
companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost, which approximates market value.
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. If fluctuating interest rates cause the market value of the
Fund's portfolio to deviate more than 1/2of 1% from the value determined on
the basis of amortized cost, the Board of Directors will consider whether
any action should be initiated. 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. Net realized long-term capital gains, if any, are distributed at
least annually and in no event later than 60 days after the end of the
Fund's fiscal year.
d) Use of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect 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) Representations and Indemnifications -
In the normal course of business the Fund enters into contracts that
contain a variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the
Fund that have not yet occurred. However, based on experience, the Fund
expects the risk of loss to be remote.
f) General -
Securities transactions are recorded on a trade date basis. Interest income
including accretion of discount and amortization of premium, is accrued as
earned. Realized gains and losses from securities transactions are recorded
on the identified cost basis.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIALS STATEMENTS (CONTINUED)
================================================================================
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, LLC (the "Manager") at the
annual rate of .40% 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.
Pursuant to a Distribution 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 covering all classes 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 a fee equal to .25%
of the Fund's average daily net assets with respect only to the Class A shares.
There were no additional expenses borne by the Fund pursuant to the Distribution
Plan.
For the year ended August 31, 2007 the Manager and Distributor voluntarily
waived the following fees:
<s>
Administration fees $ 134,695
Shareholder servicing fees - Class A shares 1,095
----------------
Total fees waived $ 135,790
================
The Manager and Distributor have no right to recoup prior fees waived.
Prior to January 1, 2007, fees were paid to Trustees who were unaffiliated
with the Manager on the basis of $1,000 per annum plus $300 per meeting attended
(there were five scheduled Board Meetings each year). In addition, the Audit
Committee Chairman received an aggregate payment of $1,000 per quarter allocated
among the funds of the Reich & Tang Complex on whose Audit Committee he serves
and each member of the Audit Committee received an aggregate payment of $750 per
Audit Committee meeting attended allocated among the funds of the Reich & Tang
Complex. The Lead Independent Director received an additional annual fee of
$8,000 and the Deputy Lead Director receives an additional annual fee of $4,000,
both fees paid quarterly and allocated among the funds of the Reich & Tang
Complex. Effective January 1, 2007, the Directors of the Fund not affiliated
with the Manager are paid a fee that is to be allocated among multiple funds, as
defined below. Each Independent Director receives an annual retainer of $50,000
and a fee of $3,000 for each Board of Directors meeting attended. Each
Independent Director also receives a fee up to $1,500 at the discretion of the
Lead Director for telephonic Board meetings and committee meetings that are not
held on the same day as a Board Meeting. In addition, the Lead Independent
Director receives an additional $12,000, payable quarterly and the Audit
Committee Chairman each receives an additional annual fee of $8,000, payable
quarterly. Each Independent Director will also be reimbursed for all
out-of-pocket expenses relating to attendance at such meetings. The fees noted
above are to be allocated at the discretion of the Manager among the Fund, the
California Daily Tax Free Income Fund, Inc., the Connecticut Daily Tax Free
Income Fund, Inc., the New Jersey Daily Municipal Income Fund, Inc., the Daily
Income Fund, the Daily Tax Free Income Fund, Inc., and the Short Term Income
Fund, Inc.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees pursuant to the Transfer Agency
Agreement between Reich & Tang and the Fund. Reich & Tang Services, Inc., an
affiliate of the Manager, as transfer agent and dividend agent, receives a fee
of $17.40 per account per year or a minimum of 0.05% of the monthly average net
assets of the Class A and Class B Shares of the Fund.
For the year ended August 31, 2007 these fees amounted to:
<Table>
Amount %
-------------- ------ -----
Class A shares..................... $28,693 *
Class B Shares..................... 16,679 0.05%
--------
Total Transfer Agency Fees........ $45,372
========
* Per Account
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================================================================================
3. Compensating Balance Arrangement and Other Transactions
Reich & Tang and the Bank of New York have entered into a compensating
balance arrangement, effective November 1, 2006, with the Florida Daily
Municipal Income Fund, which would allow the Fund to compensate the Bank for any
overdrafts by maintaining a positive cash balance the next day. Conversely, on
any day the Fund maintains a positive balance it will be allowed to overdraw the
account as compensation. In both cases the Federal Reserve requirements,
currently 10%, will be assessed. Therefore, all overdrafts must be compensated
at 100% of the total and all positive balances will allow for an overdraft of
90% of the total. On August 31, 2007, the cash balance was ($3,740,205).
For the year ended August 31, 2007, the breakdown of expenses paid indirectly by
the Fund were as follows:
Custodian expenses $ 3,398
=============
4. Transactions in Shares of Beneficial Interest
At August 31, 2007, an unlimited number of shares of beneficial interest
($.001 par value) were authorized. Transactions, all at $1.00 per share, were as
follows:
Year Ended Year Ended
Class A shares August 31, 2007 August 31, 2006
-------------- ---------------- ---------------
Sold............................... 278,181,000 343,234,538
Issued on reinvestment of dividends 1,295,234 1,566,297
Redeemed........................... (324,363,896) (334,176,510)
----------------- ---------------
Net increase (decrease) (44,887,662) 10,624,325
================= ===============
Class B shares
--------------
Sold............................... 274,123,588 217,805,473
Issued on reinvestment of dividends 383,292 149,599
Redeemed........................... (287,217,046) (212,561,701)
---------------- ---------------
Net increase (decrease)............ (12,710,166) 5,393,371
================ ===============
5. Concentration of Credit Risk
The Fund invests primarily in obligations of political subdivisions of the
State of Florida and, accordingly, is subject to the credit risk associated with
the non-performance of such issuers. Approximately 88% of these investments are
further secured, as to principal and interest, by credit enhancements such as
letters of credit, municipal bond insurance and guarantees 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 credit enhancements, and by limiting the amount of
holdings with credit enhancements from one financial institution.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIALS STATEMENTS (CONTINUED>
================================================================================
6. Tax Information
The tax character of all distributions paid during the years ended August
31, 2007 and 2006 were tax exempt income.
At August 31, 2007, the Fund had no distributable earnings.
The Fund has adopted Financial Accounting Standards
Board("FASB")Interpretation No. 48, Accounting for Uncertainty in Income Taxes,
an interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 requires
Management to determine whether a tax position of the Fund is more likely than
not to be sustained upon examination by the applicable taxing authority,
including resolution of any related appeals or litigation processes, based on
the technical merits of the position. The tax benefit to be recognized is
measured as the largest amount of benefit that is greater than fifty percent
likely of being realized upon ultimate settlement which could result in the Fund
recording a tax liability that would reduce net assets. FIN 48 must be applied
to all existing tax positions upon initial adoption and the cumulative effect,
if any, is to be reported as an adjustment to net assets.
Based on its analysis, Management has determined that the adoption of FIN
48 did not have an impact to the Fund's financial statements upon adoption.
However, Management's conclusions regarding FIN 48 may be subject to review and
adjustment at a later date based on factors including, but not limited to,
further implementation guidance expected from the FASB, and on-going analyses of
tax laws, regulations and interpretations thereof.
7. New Accounting Pronouncements
In September 2006, FASB issued Statement of Financial Accounting Standards
No. 157, Fair Value Measurements ("SFAS157"). SFAS 157 defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. SFAS 157 applies to reporting periods beginning after
November 15, 2007. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Fund's financial statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
8. Financial Highlights
Years Ended August 31,
--------------------------------------------------------------------------
Class A shares 2007 2006 2005 2004 2003
-------------- ---- ---- ---- ---- ----
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...................... 0.027 0.022 0.010 0.001 0.003
Net realized and unrealized gain (loss)....
on investments............................. -- -- 0.000 -- --
-------- -------- -------- -------- -------
Total from investment operations............... 0.027 0.022 0.010 0.001 0.003
Less distributions from:
Dividends from net investment income........... (0.027) (0.022) (0.010) (0.001) (0.003)
Net realized gains on investments -- -- (0.000) -- --
-------- -------- -------- -------- -------
Total Distributions (0.027) (0.022) (0.010) (0.001) (0.003)
-------- -------- -------- --------- --------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======== ========= =========
Total Return 2.71% 2.20% 1.02% 0.12% 0.31%
Ratios/Supplemental Data
Net assets, end of year (000's)..................... $ 38,712 $ 83,599 $ 72,975 $ 63,766 $ 58,994
Ratios to average net assets:
Expenses (net of fees waived) (a)........... 1.00% 0.99% 0.99% 0.95% 0.93%
Net investment income....................... 2.67% 2.17% 1.04% 0.12% 0.29%
Management and/or administration fees waived 0.17% 0.16% 0.16% 0.16% 0.17%
Shareholder servicing fees waived........... 0.00% 0.01% -- 0.01% 0.02%
Expenses paid indirectly.................... 0.00% -- 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly if applicable.
</FN>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIALS STATEMENTS (CONTINUED>
================================================================================
8. Financial Highlights (continued)
Years Ended August 31,
Class B shares 2007 2006 2005 2004 2003
-------------- ---- ---- ---- ---- ----
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........................ 0.029 0.024 0.013 0.004 0.006
Net realized and unrealized gain (loss)
on investments............................... -- -- 0.000 -- --
-------- --------- -------- -------- -------
Total from investment operations 0.029 0.024 0.013 0.004 0.006
-------- --------- -------- -------- -------
Less distributions from:
Dividends from net investment income........ (0.029) (0.024) (0.013) (0.004) (0.006)
Net realized gains on investments........... -- -- (0.000) -- --
-------- --------- -------- -------- -------
Total Distributions (0.029) (0.024) (0.013) (0.004) (0.006)
-------- --------- -------- -------- -------
Net asset value, end of year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======== ======== =======
Total Return........................................ 2.98% 2.48% 1.31% 0.37% 0.55%
Ratios/Supplemental Data
Net assets, end of year (000's)..................... $ 36,839 $ 49,550 $ 44,156 $ 49,080 $ 57,313
Ratios to average net assets:
Expenses (net of fees waived) (a)........... 0.74% 0.72% 0.70% 0.69% 0.69%
Net investment income....................... 2.94% 2.44% 1.27% 0.37% 0.57%
Management and/or administration fees waived 0.17% 0.16% 0.16% 0.16% 0.17%
Expenses paid indirectly 0.00% -- 0.00% 0.00% 0.00%
<FN>
(a) Includes expenses paid indirectly if applicable.
</FN>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To the Board of Trustees and Shareholders of
Florida Daily Municipal Income Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, 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 Florida Daily Municipal Income Fund
(the "Fund") at August 31, 2007, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. 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 audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards 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 audits, which included confirmation of securities at August
31, 2007 by correspondence with the custodian, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 29, 2007
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
ADDITIONAL INFORMATION
(UNAUDITED)
================================================================================
ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund is required to file its complete schedule of portfolio holdings
with the Securities and Exchange Commission ("SEC") on Form N-Q for its first
and third fiscal quarters. The Fund's Form N-Q is available without charge on
the SEC's website (http://www.sec.gov) or by calling the Fund toll free at (800)
433-1918. You can also obtain copies of the Fund's Form N-Q by visiting the
SEC's Public Reference Room in Washington, DC (please call the SEC at (800)
732-0330 for information on the operation of the Public Reference Room).
INFORMATION ABOUT PROXY VOTING
Information regarding the Fund's proxy voting record for the 12 month
period ending June 30 of each year is filed with the SEC on Form N-PX no later
than August 31 of each year. The Fund's Form N-PX is available without charge,
upon request, by calling the Fund at (800) 433-1918 and on the SEC's website
(http//www.sec.gov). The Fund does not presently invest in voting securities and
has therefore not adopted proxy voting policies and procedures.
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT
On June 7, 2007, the Trustees approved the continuance of the Investment
Management Contract. Specifically, with regards to the approval of the
continuance of the Investment Management Contract, the Board had considered the
following factors:
1) The nature, extent and quality of services provided by the Manager.
The Trustees reviewed in detail the nature and extent of the services
provided by the Manager under the terms of the Fund's Investment Management
Contract and the quality of those services over the past year. The Trustees
noted that the services include managing the investment and reinvestment of the
Fund's assets; the provision of reports to the Board regarding changes in
portfolio holdings, important developments affecting the entities whose
securities are included in the Fund's portfolio, the money market industry and
the economy in general; and the payment of compensation of all officers,
trustees and employees of the Fund who are officers of the Manager or its
affiliates. The Board also observed that the Manager provides various
administrative services to the Fund pursuant to the terms of a separate
Administrative Services Contract and considered the nature, extent and quality
of services provided under that agreement as well. The Trustees evaluated these
factors based on their direct experience with the Manager and in consultation
with counsel to the independent Trustees and Fund counsel. The Trustees
concluded that the nature and extent of the services provided under the
Investment Management Contract were reasonable and appropriate in relation to
the management fee, that the level of services provided by the Manager had not
diminished over the past year and that the quality of services continues to be
high. The Trustees reviewed the personnel responsible for providing advisory
services to the Fund and concluded, based on their experience and interaction
with the Manager, that (i) the Manager was able to retain quality portfolio
managers and other personnel; (ii) the Manager exhibited a high level of
diligence and attention to detail in carrying out its advisory responsibilities
under the Investment Management Contract; (iii) the Manager was responsive to
requests of the Trustees; and (iv) the Manager had kept the Trustees apprised of
developments relating to the Fund and the industry in general. The Trustees also
focused on the Manager's reputation and long-standing relationship with the Fund
and, in particular, the experience of the Manager in advising money market
funds. The Trustees also noted the high quality of services provided by the
Manager under the Administrative Services Contract.
2) The performance of the Fund and the Manager.
The Trustees reviewed the investment performance of the Fund, both on an
absolute basis and on a gross basis, as compared to various Lipper peer group
categories ("Performance Peer Groups") for the one-month, one-, three-, five-
and ten-year periods ended March 31, 2007.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT (continued)
2) The performance of the Fund and the Manager. (continued)
The Performance Peer Groups were comprised of: (i) the Fund and eight other
retail no-load "other states" tax-exempt money market funds, as classified by
Lipper, (ii) the Fund and two other retail "other states" tax-exempt money
market funds that are considered by the Manager to be competitors of the Fund
with similar distribution channels, and (iii) the Fund and all other "other
states" tax-exempt money market funds in the Lipper universe regardless of asset
size or primary channel of distribution. The Manager advised the Board that it
does not advise or subadvise: (i) other funds with a similar investment policy
to the Fund's; or (ii) other types of accounts, such as institutional and
pension accounts, with a similar investment policy to the Fund's. The Trustees
used the Fund's performance against the Performance Peer Groups to provide
objective comparative benchmarks against which they could assess the Fund's
performance. The Trustees considered those comparisons as helpful in their
assessment as to whether the Manager was obtaining for the Fund's shareholders
the performance that was available in the marketplace given the Fund's
investment objectives, strategies, limitations and restrictions. In reviewing
the Fund's performance, the Board noted that Fund has generally underperformed
two of the Performance Peer Groups for all time periods, except the one-month
time period, while outperforming the Manager selected peer group of Fund's with
similar distribution channels. At the same time, the Board considered that the
difference between the best and worst performing funds in the Performance Peer
Groups for all time periods was small and that the difference in the performance
of the Fund and the best performing fund in the Performance Peer Groups was in
many cases even smaller. The Board also considered the Manager's explanation
that its investment strategy and process was generally more conservative than
many of its competitors and involved greater concentration in Florida securities
than many funds in the Performance Peer Groups. The Board discussed performance
with the Manager and the Manager's plans to improve performance in the future.
The Board determined to continue to monitor the Fund's performance carefully.
In connection with its assessment of the overall performance of the Manager, the
Trustees considered the Manager's financial condition and whether it has the
resources necessary to continue to carry out its obligations under the
Investment Management Contract. The Trustees took into account, in this regard,
the payments made by the Manager from its own resources to securities brokers,
banks and financial institutions or other industry professionals or
organizations whose customers are shareholders of the Fund ("Participating
Organizations") in connection with distribution assistance and shareholder
servicing provided by the Participating Organizations. The Trustees concluded
that the Manager had the financial resources necessary to continue to perform
its obligations under the Investment Management Contract and to continue to
provide the high quality services that it had provided to the Fund to date.
3) The cost of the advisory services and the profits to the Manager and its
affiliates from the relationship with the Fund.
In connection with the Trustees' consideration of the level of the
management fee, the Trustees considered a number of factors. The Trustees
compared the level of the management fee for the Fund and the level of the
combined management-administrative fees against comparative Lipper expense peer
groups ("Expense Peer Groups"). The Expense Peer Groups consist of: (i) the Fund
and eight other retail no-load "other states" tax-exempt money market funds, as
classified by Lipper, (ii) the Fund and two other retail "other states"
tax-exempt money market funds that are considered by the Manager to be
competitors of the Fund with similar distribution channels, and (iii) the Fund
and all other "other states" tax-exempt money market funds in the Lipper
universe (excluding outliers). The Trustees also considered comparative total
fund expenses of the Fund and the Expense Peer Groups. The Trustees used this
combined fee information and total expense data as a guide to help assess the
reasonableness of the Fund's management fee, although they acknowledged that it
was difficult to make precise comparisons with other funds since the exact
nature of services provided under the Expense Peer Group fund agreements is
often not
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT (COMTINUED)
(UNAUDITED)
================================================================================
INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT (continued)
3) The cost of the advisory services and the profits to the Manager and its
affiliates from the relationship with the Fund. (continued)
apparent. The Trustees also viewed the Expense Peer Group fee information
as a whole as useful in assessing whether the Manager was providing services at
a cost that was competitive with other, similar funds. The Board noted that the
contract rates of the Fund's management fee and combined fees (management and
administrative) were generally higher, but within the range, of that of the
Expense Peer Groups. In assessing this information, the Trustees considered both
the comparative contract rates as well as the level of the management fees after
waivers and/or reimbursements.
The Trustees also noted that the Manager did not advise or sub-advise any other
registered investment companies or other types of accounts, such as
institutional or pension accounts, with similar investment policies to the Fund.
The Trustees concluded that the level of the management fee was reasonable in
light of these factors.
The Trustees also considered the profitability to the Manager and its affiliates
arising out of their relationships with the Fund. In this regard the Trustees
reviewed profitability data relating to the Manager and its affiliates for the
year ended December 31, 2006. The Trustees considered revenues received by the
Manager under the Investment Management Contract and Administrative Services
Contract as well as revenues received by the Manager's affiliates under the
12b-1 Plans and related agreements, Transfer Agency Agreement and revenues
derived from Reich & Tang's cash management business (e.g. checking and debit
card services that are offered by Reich & Tang to Fund shareholders through
certain Participating Organizations). The Trustees concluded that the
profitability of the Fund to the Manager and its affiliates was not excessive.
4) The extent to which economies of scale will be realized as the Fund
grows and whether fee levels reflect those economies of scale.
With respect to the Trustees' consideration of economies of scale, the
Trustees discussed with the Manager whether economies of scale would be realized
by it in its management of the Fund at higher asset levels. The Trustees also
discussed with the Manager whether certain of the Manager's costs would increase
if asset levels rise and observed that as assets rise, the Manager and its
affiliates may be required to pay increased fees to Participating Organizations.
The Trustees also reviewed the Expense Peer Group data to assess whether the
Expense Peer Group funds had advisory or administrative fee breakpoints and, if
so, at what asset levels. The Trustees concluded that they were unable to assess
at this time whether economies of scale would be realized if the Fund were to
experience significant asset growth. In the event there were significant asset
growth in the future, the Trustees determined to reassess whether the management
fee appropriately took into account any economies of scale that had been
realized as a result of that growth.
5) Other Factors.
In addition to the above factors, the Trustees acknowledged the importance
of the ability of the Manager's affiliate, the distributor, to market the Fund
through its distribution networks, including its customer service and
administration system with banks and bank customers.
Based on a consideration of all these factors in their totality, the Trustees,
including all of the disinterested Trustees, determined that the Fund's
management fee was fair and reasonable with respect to the quality of services
that the Manager provides and in light of the other factors described above that
the Trustees deemed relevant. The Trustees based their decision on evaluations
of all these factors as a whole and did not consider any one factor as
all-important or controlling. The disinterested Trustees were also assisted by
the advice of independent counsel in making this determination.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
Trustees and Officers Information
August 31, 2007(1)
------------------------------------------------------------------------------------------------------------------------------------
Name, Address(2), Position(s) Term of Principal Occupation(s) Number of Other
and Age Held with Office During Past Portfolios in Directorships
Fund and Length of 5 Years Fund Complex held by
Time Overseen by Trustee
Served(3) Trustee
------------------------------------------------------------------------------------------------------------------------------------
Disinterested Trustees:
------------------------------------------------------------------------------------------------------------------------------------
Edward A Kuczmarski, Trustee Since 2006 Certified Public Accountant and Partner of Director Trustee of
Age 57 Hays and Company LLP since 1980. /Trustee of the Empire
fourteen Builder
portfolios Tax Free
Bond Fund
and
Director
of ISI
Funds
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Dr. W. Giles Mellon, Trustee Since 1994 Professor Emeritus of Business Director/Trustee N/A
Age 76 Administration in the Graduate School of of thirteen
Management, Rutgers University with which portfolios
he has been associated with since 1966.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Robert Straniere, Trustee Since 1994 Owner, Straniere Law Firm since 1980, NYS Director/Trustee Director
Esq. Assemblyman from 1981 to 2004. Partner, of thirteen of Sparx
Age 66 Hantor-Davidoff law firm since May, 2006. portfolios Japan Funds
Partner, Gotham Global Group since June
2005. President, NYC Hot Dog Co., since
November, 2005. Partner, Gotham Strategies
since May, 2005. Counsel at Fisher & Fisher
from 1995 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Dr. Yung Wong, Trustee Since 1994 Managing Director of Abacus Associates, an Director/Trustee N/A
Age 68 investment firm, since 1996. of thirteen
portfoliO
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
TRUSTEES AND OFFICERS INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
Trustees and Officers Information
August 31, 2007(1)
------------------------------------------------------------------------------------------------------------------------------------
Name, Address(2), Position(s) Term of Principal Occupation(s) Number of Other
and Age Held with Office During Past Portfolios in Directorships
Fund and Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Trustee
Trustee
------------------------------------------------------------------------------------------------------------------------------------
Interested Trustees/Officers:
------------------------------------------------------------------------------------------------------------------------------------
Steven W. Duff,(4) President Since 1994 Manager and President of Reich & Tang Asset Director/Trustee None
Age 53 and Trustee Management, LLC ("RTAM, LLC"), a registered and/or
Investment Advisor and President of the Officer of
Mutual Funds Division of RTAM, LLC. eighteen
Associated with RTAM, LLC since 1994. Mr. portfolios
Duff is also President and Director/Trustee
of eight other funds in the Reich & Tang
Fund Complex, Director of Pax World Money
Market Fund, Inc., Principal Executive
Officer of Delafield Fund, Inc. and
President and Chief Executive Officer of
Tax Exempt Proceeds Fund, Inc. Mr. Duff
also serves as a Director of Reich & Tang
Services, Inc. and Reich & Tang
Distributors, Inc.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Richard De Sanctis, Vice Since 2005 Executive Vice President and Chief N/A N/A
Age 50 President Financial Officer of RTAM LLC. Associated
Treasurer 1994 to 2004 with RTAM, LLC since 1990. Mr. De Sanctis
and is Vice President of ten other funds in the
Assistant Reich & Tang Fund Complex, Vice President
Secretary and Assistant Secretary of Cortland Trust,
Inc. and serves as Executive Vice President
and Chief Financial Officer of Reich & Tang
Services, Inc. and Reich & Tang
Distributors, Inc. Prior to December 2004,
Mr. De Sanctis was Treasurer and Assistant
Secretary of eleven funds in the Reich &
Tang Fund Complex and Vice President,
Treasurer and Assistant Secretary of
Cortland Trust, Inc.
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
Trustees and Officers Information
August 31, 2007(1)
------------------------------------------------------------------------------------------------------------------------------------
Name, Address(2), Position(s) Term of Principal Occupation(s) Number of Other
and Age Held with Office During Past Portfolios in Directorships
Fund and Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Trustee
Trustee
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Interested Trustees/Officers:
------------------------------------------------------------------------------------------------------------------------------------
Michael Lydon, Vice Since 2005 Executive Vice President and Chief N/A N/A
Age 44 President Operations Officer of RTAM, LLC.
Associated with RTAM, LLC since January
2005. Mr. Lydon was Vice President at
Automatic Data Processing from July 2000
to December 2004. Prior to July 2000,
Mr. Lydon was Executive Vice President
and Chief Information Officer of RTAM,
LLC. Mr. Lydon is also Vice President of
eleven other funds in the Reich & Tang
Fund Complex. Mr. Lydon also serves as
Executive Vice President and Chief
Operations Officer for Reich & Tang
Distributors, Inc. and Reich & Tang
Services, Inc.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Christine Manna, Secretary Since 2007 Vice President of the Manager. Ms. Manna is N/A N/A
Age 37 also Secretary of eleven other funds in the
Reich & Tang Complex. Ms. Manna has been
associated with the Manager and its
predecessors since June 1995. Ms. Manna is
also a Vice President of Reich & Tang
Services, Inc. and Reich & Tang
Distributors, Inc.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Dana E. Messina, Vice Since 1995 Executive Vice President of RTAM, LLC. N/A N/A
Age 50 President Associated with RTAM, LLC since 1980. Ms.
Messina is also Vice President of eight
other funds in the Reich & Tang Fund
Complex. Ms. Messina also serves as
Executive Vice President of Reich & Tang
Distributors, Inc.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
TRUSTEES AND OFFICERS INFORMATION (CONTINUED)
(UNAUDITED)
================================================================================
Trustees and Officers Information (continued)
August 31, 2007(1)
------------------------------------------------------------------------------------------------------------------------------------
Name, Address(2), Position(s) Term of Principal Occupation(s) Number of Other
and Age Held with Office During Past Portfolios in Directorships
Fund and Length of 5 Years Fund Complex held by
Time Served(3) Overseen by Trustee
Trustee
------------------------------------------------------------------------------------------------------------------------------------
Interested Trustees/Officers: (Continued)
------------------------------------------------------------------------------------------------------------------------------------
Anthony Pace, Treasurer Since 2004 Vice President of RTAM, LLC since September N/A N/A
Age 42 and 2004. Mr. Pace was a Director of a Client
Assistant Service Group at GlobeOp Financial Services,
Secretary Inc. from May 2002 to August 2004 and
Controller/Director of Mutual Fund
Administration for Smith Barney Funds
Management LLC and Salomon Brothers Asset
Management Inc. from 1998 to May 2002. Mr.
Pace is also Treasurer and Assistant
Secretary of eleven other funds in the Reich
& Tang Fund Complex.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Robert Rickard, Vice Since 2007 Senior Vice President of the Manager. N/A N/A
Age 38 President Associated with the Manager since December
1991. Mr. Rickard is also Vice President of
eleven other funds in the Reich & Tang Fund
Complex.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Michael Zuckerman, Chief 2007 Consultant to RTAM, LLC since 2006. N/A N/A
Age 42 Compliance Director and Counsel, BlackRock, Inc.
Officer November 2005 to April 2006. Associate,
Dechert LLP July 2004 to November 2005 and
April 1999 to April 2001. Deputy General
Counsel, Millennium Partners, L.P. March
2003 to July 2004. Vice President Allianz
Dresdner Asset Management, LLC April 2001 to
December 2002.
------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Statement of Additional Information includes additional information
about Florida Daily Municipal Income Fund (the "Fund") trustees/officers
and is available, without charge, upon request by calling the Fund's
transfer agent at (800) 433-1918.
(2) The address for each of the above trustees/officers of the Fund is Reich &
Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.
(3) Each Trustee will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Trustee and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is
removed by the Board of Trustees or shareholders, in accordance with the
Fund's Declaration of Trust, as amended, and Amended and Restated By-Laws.
Each officer will hold office for an indefinite term until the date he or
she resigns or retires or until his/her successor is elected and qualifies.
(4) Steven W. Duff is deemed an interested person of the Fund due to his
affiliation with Reich & Tang Asset Management, LLC, the Fund's investment
advisor.
</FN>
--------------------------------------------------------------------------------
FLORIDA
DAILY
MUNICIPAL
INCOME
FUND
------------------------------------------------------
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.
------------------------------------------------------
Florida Daily Municipal Income Fund
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, LLC
600 Fifth Avenue
New York, New York 10020
Custodian
The Bank of New York
2 Hanson Place, 7th Floor
Brooklyn, New York 11217 Annual Report
August 31, 2007
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
FL8/07A
--------------------------------------------------------------------------------
ITEM 2: CODE OF ETHICS
The registrant has adopted a Code of Ethics applicable to its Principal
Executive and Senior Financial Officers.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board of Trustees has determined that there is an audit
committee financial expert serving on its audit committee, Edward A. Kuczmarski,
who is "independent," as defined in the instructions to this Item.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES
FYE 8/31/2007 FYE 8/31/2006
4(a) Audit Fees $ 29,000 $ 26,800
4(b) Audit Related Fees $ 0 $ 0
4(c) Tax Fees $ 3,750 $ 3,750
4(d) All Other Fees $ 0 $ 0
4(e)(1) The audit committee has adopted pre-approval policies and procedures
whereby the audit committee has pre-approved the provision of certain enumerated
tax services to the registrant by the registrant's principal accountant to the
extent the fee is less than $5,000 per occurrence.
4(e)(2) None
4(f) Not applicable.
4(g) $3,750 and $54,560, respectively, were the amount of non-audit fees that
were billed by the registrant's accountant for services rendered to (i) the
registrant, and (ii) the registrant's investment adviser and any control person
of the adviser that provides ongoing services to the registrant for the fiscal
year ended August 31, 2007. $3,750 and $49,500, respectively, were the amount of
non-audit fees that were billed by the registrant's accountant for services
rendered to (i) the registrant, and (ii) the registrant's investment adviser and
any control person of the adviser that provides ongoing services to the
registrant for the fiscal year ended August 31, 2006.
4(h) The registrant's audit committee has considered whether its principal
accountant's provision of non-audit services that were rendered to the
registrant's investment adviser, and any control persons of the investment
adviser that provides ongoing services to the registrant, that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is
compatible with maintaining the principal accountant's independence.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS
Schedule of Investments in securities of unaffiliated issuers is included under
Item 1.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that were implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9.
ITEM 10: CONTROLS AND PROCEDURES
(a) The registrant's Principal Executive Officer and Principal Financial
Officer have evaluated the design and operation of the registrant's
disclosure controls and procedures within 90 days of this filing and
have concluded that the registrant's disclosure controls and procedures
were effective in ensuring that information required to be disclosed by
the registrant in this Form N-CSR was recorded, processed, summarized
and reported on a timely basis.
(b) There were no changes in the registrant's internal controls over
financial reporting that occurred during the second fiscal quarter of
the period covered by this report that have materially affected, or are
reasonably likely to affect, the registrant's internal controls over
financial reporting.
ITEM 11: EXHIBITS
(a)(1) Code of Ethics.
(a)(2) Certifications of Principal Executive Officer and Principal Financial
Officer, under Rule 30a-2 of the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18
U.S.C. ss.1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Florida Daily Municipal Income Fund
By (Signature andTitle)* /s/Christine Manna
Christine Manna,
Secretary
Date: November 8, 2007
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title)* /s/Steven W. Duff
Steven W. Duff,
President
Date: November 8, 2007
By (Signature and Title)* /s/Anthony Pace
Anthony Pace,
Treasurer
Date: November 8, 2007
* Print the name and title of each signing officer under his or her signature.