<PAGE>
A N N U A L R E P O R T
Small box above fund name showing a lions face.
DREYFUS SPECIAL GROWTH FUND
DECEMBER 31, 1994
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with performance and portfolio information for
the Dreyfus Special Growth Fund for the year ended December 31, 1994.
As you know from recent correspondence, The Laurel Funds are integrating with
The Dreyfus Family of Funds. As a result of this integration, the Laurel
Special Growth Fund is now known, and publicly listed, as the Dreyfus Special
Growth Fund. Please be assured that the new name does not affect the value of
your account or the investment objective or strategy of your Fund.
In the pages that follow, we have provided detailed financial statements, a
description of the market environment over the last twelve months and a
commentary on your Fund's investment management strategy and portfolio changes
for the reporting period.
We would like to extend our appreciation for your support and hope that you
will find that the Dreyfus Special Growth Fund, which is now part of The
Dreyfus Family of Funds, will continue to satisfy your investment needs. As
always, we welcome your thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds Trust
Dreyfus Special Growth Fund
February 17, 1995
1
................................................................................
<PAGE>
TABLE of CONTENTS
................................................................................
<TABLE>
<S> <C>
Shareholder Letter........................................ 1
Economic Review........................................... 3
Portfolio Overview........................................ 4
Performance Summary....................................... 5
Portfolio of Investments.................................. 7
Statement of Assets and Liabilities....................... 11
Statement of Operations................................... 12
Statement of Changes in Net Assets........................ 13
Financial Highlights...................................... 14
Notes to Financial Statements............................. 18
Independent Auditors' Report.............................. 26
Tax Information........................................... 27
</TABLE>
2
................................................................................
<PAGE>
ECONOMIC REVIEW
................................................................................
ECONOMIC STRENGTH, MARKET WEAKNESS
Following several years of stop-and-start recovery, the U.S. economy finally
established a steady pace of expansion in 1994. Initially, this helped to
propel the stock market upward, but as the economy continued to expand, the
market stumbled. Broad market averages such as the S&P 500 posted minimal
declines of 2-3% for the year, although many individual stocks lost up to 50%
of their value. The market was also volatile, with investors volleying between
elation and alarm in response to each new government economic report and
interest rate move.
Sector performance varied widely. Basic industrial stocks led performance for
the first three quarters, before beginning to sell off somewhat toward year
end. High technology, especially PC-related stocks, had an exceptional run
during the summer and continued strong as the year drew to a close. After two
dismal years, health care began to come back, benefiting from the de facto
defeat of Washington's reform legislation and several important mergers and
acquisitions of health care-related companies. Transportation, consumer
durables such as autos, utilities, and finance sectors fared worse.
RISING INTEREST RATES DAMPENED EQUITY PERFORMANCE
Beginning in February, the Federal Reserve Board signaled its intention to
thwart potential inflation by raising short-term interest rates a total of six
times over the next eleven months. The first few hikes sent bond, and then
equity markets, reeling. Investors already felt the equity market could be
somewhat overvalued. The rise in interest rates provided sufficient fuel for
many investors to sell, thereby driving down equity prices. While later
increases had a less dramatic effect, a kind of catch-22 scenario began to
emerge. Although corporate profits remained strong, investors started to
discount them, believing these profits to be the last of a good thing because
the economy would soon begin to slow significantly in response to the Fed's
monetary tightening actions.
The Fed's first actions were prompted by concerns that the economy had begun
to grow too quickly, and that inflation would surely follow. Later, inflation
did begin to emerge at the producer level. Although consumer prices had yet to
rise, commodity prices were up, and the Fed felt these increases would
eventually flow through to the retail level unless interest rates rose.
Rapidly developing foreign recoveries were, and continue to be, another
concern for the Fed, since international growth creates demand for U.S. goods
and services that puts inflationary pressure on our economy.
MIXED SIGNALS AHEAD
Our outlook for the stock market remains one of cautious long-term optimism,
tempered by the knowledge that things really could go either way in the period
just ahead. While the equity market is not expensive at present, neither is it
cheap enough to provide compelling values that would entice new investors to
buy in and fuel a rally. On one hand, investors could begin to sell equities,
deciding that rising rates have made bonds a
3
................................................................................
<PAGE>
ECONOMIC REVIEW (continued)
................................................................................
better relative investment. On the other hand, U.S. economic growth may
moderate some, but it is unlikely to slow significantly given the
strengthening of economies abroad. If the bond market stabilizes, then the
equity market could rise on the strength of good economic fundamentals.
PORTFOLIO OVERVIEW
................................................................................
The 1994 market environment proved especially challenging for the Fund, as the
inherent volatility of its primary sectors, energy, consumer services, health
care, technology, telecommunications and basic industries, produced a decline
in portfolio value. While the portfolio manager did attempt to reduce
volatility by investing up to 8% in short-term cash instruments, the total
return for the annual period was (18.22)% for the Investor shares and (17.91)%
for the Class R shares.
The Fund's management believes that the disappointing year was caused by a
major correction in the telecommunications stock holdings and the emerging
markets exposure which declined 20%. In addition, regional airline holdings
imploded within the transportation sector.
Currently, the Fund maintains a sizeable concentration in telecommunications
and energy stocks -- specifically oil service and natural gas. In the
telecommunications sector, several changes are taking place that may benefit
future stock performance. Most importantly perhaps are the cable and wireless
communications technologies now beginning to replace the copper wire
technology around the world. Less developed countries with huge populations
like China, India, and Indonesia are starting to modernize their
telecommunications services in order to attract development capital. To
accomplish this feat, these countries may turn to the leading global
telecommunications companies.
In the energy sector, the opportunities arise not from changing technology but
from changes we anticipate in the investment climate itself. Low oil prices at
the start of 1994 produced energy stock declines that never recovered, even
though oil prices rose. However, while we concede there is more than enough
oil and gas below ground surface, we challenge conventional wisdom that there
is adequately deliverable supply to meet the escalating energy appetites of
the world's growing economies. Instead, we anticipate a rise in energy stock
prices as we believe demand will exceed supply in the years ahead.
4
................................................................................
<PAGE>
PERFORMANCE SUMMARY
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND (UNAUDITED)
CHANGE IN VALUE OF $10,000 INVESTED FROM JANUARY 1, 1985 - DECEMBER 31, 1994 +
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in Dreyfus Special Growth
Fund Investor shares on December 31, 1984 through December 31, 1994 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Stock Price
Index and Lipper Growth Fund Index. The plot points used to draw the line graph
were as follows:
<TABLE>
<CAPTION>
Growth of
$10,000
Invested in Growth of $10,000
Investor Investment in the Growth of $10,000
Month shares of the Standard & Poor's 500 Investment in the
Ended Fund Stock Price Index Lipper Growth Fund Index
<S> <C> <C> <C>
12/84 $10,000 $ 10,000 $ 10,000
3/85 11,679 10,918 10,920
6/85 12,180 11,720 11,702
9/85 11,466 11,240 11,689
12/85 13,480 13,174 13,032
3/86 16,098 15,032 15,035
6/86 16,940 15,919 15,838
9/86 14,225 14,808 14,565
12/86 14,513 15,634 15,098
3/87 17,120 18,973 17,980
6/87 17,417 19,924 18,401
9/87 18,487 21,239 19,383
12/87 13,960 16,457 15,252
3/88 15,446 17,391 16,458
6/88 16,433 18,548 17,415
9/88 16,805 18,611 17,364
12/88 16,960 19,183 17,659
3/89 18,113 20,542 19,064
6/89 20,050 22,354 20,735
9/89 21,144 24,743 22,887
12/89 20,154 25,252 22,695
3/90 18,742 24,493 22,047
6/90 19,970 26,032 23,652
9/90 17,006 22,458 19,846
12/90 19,177 24,468 21,565
3/91 23,208 28,015 25,156
6/91 21,893 27,948 24,907
9/91 23,618 29,411 26,777
12/91 24,781 31,906 29,163
3/92 26,411 31,101 28,651
6/92 24,166 31,690 28,236
9/92 25,740 32,691 28,988
12/92 31,271 34,335 31,358
3/93 34,255 35,835 32,570
6/93 35,871 36,005 33,417
9/93 40,053 36,934 35,135
12/93 37,528 37,792 35,808
3/94 34,082 36,364 34,602
6/94 33,184 36,513 33,915
9/94 33,092 38,295 35,579
12/94 30,691 38,286 35,177
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN -- INVESTOR SHARES
<S> <C>
-------------------------------------------------------------------
Year Ended 12/31/94 (18.22)%
-------------------------------------------------------------------
Five Years Ended 12/31/94 8.78%
-------------------------------------------------------------------
Ten Years Ended 12/31/94 11.87%
-------------------------------------------------------------------
<FN>
+ HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN INVESTOR SHARES (FORMERLY
RETAIL SHARES) AT JANUARY 1, 1985 AND REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS AT NET ASSET VALUE THROUGH DECEMBER 31, 1994.
THE STANDARD & POOR'S 500 STOCK INDEX IS A MARKET CAPITALIZATION INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK EXCHANGE,
AMERICAN STOCK EXCHANGE AND OVER-THE-COUNTER MARKET. BECAUSE THE INDEX IS NOT
A MANAGED PORTFOLIO, THERE ARE NO ADVISORY FEES OR INTERNAL MANAGEMENT
EXPENSES REFLECTED IN THE INDEX'S PERFORMANCE.
THE LIPPER GROWTH FUND INDEX IS A NET ASSET VALUE WEIGHTED INDEX OF THE 30
LARGEST GROWTH MUTUAL FUNDS.
INDEX INFORMATION IS AVAILABLE AT MONTH-END ONLY; THEREFORE, THE CLOSEST
MONTH-END TO INCEPTION DATE OF THE FUND HAS BEEN USED.
THIS PERIOD WAS ONE IN WHICH COMMON STOCK PRICES FLUCTUATED AND THE RESULTS
SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF DIVIDEND INCOME OR CAPITAL GAIN
OR LOSS WHICH MAY BE REALIZED FROM AN INVESTMENT IN THE FUND TODAY. NO
ADJUSTMENT HAS BEEN MADE FOR A SHAREHOLDER'S TAX LIABILITY ON DIVIDENDS OR
CAPITAL GAINS.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING FEE WAIVERS AND/OR
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF
THE PROSPECTUS AND ELSEWHERE IN THE REPORT.
NOTE: ALL FIGURES CITED HERE AND ON THE FOLLOWING PAGES REPRESENT PAST
PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES
UPON REDEMPTION MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
</TABLE>
5
................................................................................
<PAGE>
PERFORMANCE SUMMARY (continued)
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND (UNAUDITED)
CHANGE IN VALUE OF $10,000 INVESTED FROM FEBRUARY 1, 1993 - DECEMBER 31, 1994 +
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in Dreyfus Special Growth
Fund Class R shares of February 1, 1993 through December31, 1994 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Stock Price
Index and Lipper Growth Fund Index. The plot points used to draw the line graph
were as follows:
<TABLE>
<CAPTION>
Growth of
$10,000
Invested in Growth of $10,000
Class R Investment in the Growth of $10,000
Month shares of the Standard & Poor's 500 Investment in the
Ended Fund Stock Price Index Lipper Growth Fund Index
<S> <C> <C> <C>
1/93 -- $ 10,000 $ 10,000
2/01/93 $10,000 -- --
3/93 10,531 10,350 10,242
6/93 11,045 10,399 10,508
9/93 12.335 10,667 11,048
12/93 11,578 10,915 11,260
3/94 10,539 10,503 10,881
6/94 10,263 10,546 10,665
9/94 10,242 11,060 11,188
12/94 9,505 11,058 11,062
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN -- CLASS R SHARES
<S> <C>
-------------------------------------------------------------------
Year Ended 12/31/94 (17.91)%
-------------------------------------------------------------------
Inception (2/1/93) through 12/31/94 (2.62)%
-------------------------------------------------------------------
<FN>
+ HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN CLASS R SHARES (FORMERLY
INVESTMENT CLASS) AT INCEPTION (FEBRUARY 1, 1993) AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS AT NET ASSET VALUE THROUGH DECEMBER 31, 1994.
THE STANDARD & POOR'S 500 STOCK INDEX IS A MARKET CAPITALIZATION INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK EXCHANGE,
AMERICAN STOCK EXCHANGE AND OVER-THE-COUNTER MARKET. BECAUSE THE INDEX IS NOT
A MANAGED PORTFOLIO, THERE ARE NO ADVISORY FEES OR INTERNAL MANAGEMENT
EXPENSES REFLECTED IN THE INDEX'S PERFORMANCE.
THE LIPPER GROWTH FUND INDEX IS A NET ASSET VALUE WEIGHTED INDEX OF THE 30
LARGEST GROWTH MUTUAL FUNDS.
INDEX INFORMATION IS AVAILABLE AT MONTH-END ONLY; THEREFORE, THE CLOSEST
MONTH-END TO INCEPTION DATE OF THE FUND HAS BEEN USED.
THIS PERIOD WAS ONE IN WHICH COMMON STOCK PRICES FLUCTUATED AND THE RESULTS
SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF DIVIDEND INCOME OR CAPITAL GAIN
OR LOSS WHICH MAY BE REALIZED FROM AN INVESTMENT IN THE FUND TODAY. NO
ADJUSTMENT HAS BEEN MADE FOR A SHAREHOLDER'S TAX LIABILITY ON DIVIDENDS OR
CAPITAL GAINS.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING FEE WAIVERS AND/OR
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF
THE PROSPECTUS AND ELSEWHERE IN THE REPORT.
NOTE: ALL FIGURES CITED HERE AND ON THE FOLLOWING PAGES REPRESENT PAST
PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES
UPON REDEMPTION MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
</TABLE>
6
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
COMMON STOCKS -- 88.0%
ENERGY -- 21.6%
40,000 Apache Corporation $ 1,000,000
110,000 Brown, Tom, Inc.+ 1,265,000
757,000 Global Marine, Inc.+ 2,744,125
60,000 Noble Affiliates, Inc. 1,485,000
270,000 Parker Drilling Company+ 1,282,500
348,000 Rowan Companies, Inc.+ 2,131,500
90,000 Sonat Offshore Drilling, Inc. 1,597,500
240,000 Unit Corporation+ 720,000
247,500 Varco International, Inc.+ 1,546,875
171,500 Weatherford International, Inc.+ 1,672,125
-----------
15,444,625
-----------
CONSUMER SERVICES -- 13.0%
84,500 Bell Cablemedia+ 1,711,125
53,000 C-TEC Corporation, Class B+ 1,043,438
108,000 Comcast Corporation, Class A 1,660,500
45,800 Grupo Iusacell S.A., ADR+ 853,025
26 News Corporation Limited+ 89
25,000 United Engineers 123,360
61,500 Vanguard Cellular Systems, Inc., Class A+ 1,583,625
55,000 Viacom, Inc., Class B+ 2,234,375
30,000 Wharf Holdings 101,195
-----------
9,310,732
-----------
HEALTH CARE -- 12.0%
94,000 ALZA Corporation+ 1,692,000
35,000 Amgen, Inc.+ 2,065,000
32,000 Biogen, Inc.+ 1,336,000
71,000 Centocor, Inc.+ 1,153,750
74,000 Genzyme Corporation+ 2,331,000
9,990 Genzyme Corporation Tissue Repair+ 37,463
-----------
8,615,213
-----------
TECHNOLOGY -- 11.5%
43,000 Analog Devices, Inc.+ 1,510,375
48,000 Apple Computer, Inc. 1,872,000
25,000 Aspen Technology, Inc.+ 490,625
50,000 Leader Universal Holdings 160,564
75,000 Network Equipment Technologies+ 1,800,000
60,000 Nextel Communications, Inc., Class A+ 862,500
10 TSL Holdings, Inc.+ 1
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 7
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
TECHNOLOGY (CONTINUED)
45,000 Vodafone Group, ADR $ 1,513,125
-----------
8,209,190
-----------
TELECOMMUNICATIONS -- 8.7%
13,500 Advanced Information Services 161,322
20,000 Sapura Telecommunications 77,932
87,125 Tele Communications, Inc., Class A+ 1,894,969
30,000 Telecom Argentina STET 146,993
14,000 Telecomasia Corporation+ 39,036
36,100 Telecomasia Corporation, GDR++ 1,010,800
6,000 Telecomunicacoes Brasileiras S.A., ADR 265,500
25,000 Telefonica De Argentina S.A., Class B 128,744
50,000 Telefonos De Mexico, Series L 102,914
24,000 Telekom Malaysia Berhad 162,600
48,000 Telephone & Data Systems, Inc. 2,214,000
10,000 Thai Telephone & Telecommunication+ 60,944
51 The News Corporation 200
-----------
6,265,954
-----------
BASIC INDUSTRIES -- 8.0%
53,000 Boise Cascade Corporation 1,417,750
20,250 Cemex S.A. 100,130
5,000 Grupo Simec S.A., ADR+ 75,625
45,000 Inco Limited 1,288,125
5,000 Indian Rayon & Industries, Inc., GDR++ 85,000
950,000 Mariah International, Inc.+ 47,500
250,000 M.C. Packaging 96,930
35,000 Nac Re Corporation 1,172,500
80,000 Stone Container Corporation+ 1,380,000
25,000 Van Der Horst+ 76,844
-----------
5,740,404
-----------
CAPITAL GOODS -- 6.3%
1,400 Nokia AB 206,882
104,500 Seda Specialty Packaging+ 1,227,875
79,500 Tidewater, Inc. 1,470,750
50,000 Trinity Industry, Inc. 1,575,000
-----------
4,480,507
-----------
UTILITIES -- 3.7%
91,000 Airtouch Communications, Inc.+ 2,650,375
-----------
</TABLE>
8 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
COMMON STOCKS (continued)
<C> <S> <C>
FINANCIAL SERVICES -- 2.5%
10,000 AMMB Holdings Berhad $ 94,772
10,350 Banco De Galicia Buenos Aires S.A., Class B 41,398
6,000 Banco Del Sud S.A., Class B 45,598
23,000 Bangkok Bank Public Company 245,529
15,000 Malayan Banking Berhad 90,464
39,000 Overseas Union Bank 227,444
25,000 Trenwick Group, Inc. 1,059,375
-----------
1,804,580
-----------
CONSUMER NON-DURABLES -- 0.4%
37,500 H.M. Sampoerna 184,258
4,200 Panamerican Beverage, Inc. 132,825
-----------
317,083
-----------
CONSUMER DURABLES -- 0.1%
5,000 Ek Chor China Motorcycle Company 68,125
-----------
OTHER -- 0.3%
15,000 Aokam Perdana 92,814
25,000 Th Loy Industries Berhad+ 87,625
-----------
180,439
-----------
TOTAL COMMON STOCKS (Cost $69,006,886) 63,087,227
-----------
CONVERTIBLE PREFERRED -- 0.3% (Cost $153,901)
10,000 AMMB Holdings Berhad, Convertible 4,934
3,000 Philippine Long Distance Telecommunications 162,375
-----------
167,309
-----------
WARRANTS -- 1.0% (Cost $472,700)
145,000 Ann Taylor Stores Corporation, Warrant,
Expire 07/15/99+ 726,450
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 9
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
FACE VALUE)
VALUE (NOTE 1
<C> <S> <C>
COMMERCIAL PAPER -- 5.8% (Cost $4,166,000)
$2,083,000 General Electric Capital Corporation, Interest Bearing Note
5.800% due 01/03/95 $ 2,083,000
2,083,000 Ford Motor Credit Corporation, Interest Bearing Note
5.750% due 01/03/95 2,083,000
-----------
4,166,000
-----------
TOTAL INVESTMENTS (Cost $73,799,487*) 95.1% 68,146,986
OTHER ASSETS AND LIABILITIES (NET) 4.9 3,476,095
------ -----------
NET ASSETS 100.0% $71,623,081
------ -----------
------ -----------
------------------------------------------------------------------------------------
<FN>
* AGGREGATE COST FOR FEDERAL TAX PURPOSES.
+ NON-INCOME PRODUCING SECURITY.
++ SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS.
</TABLE>
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
CONTRACT VALUE
VALUE DATE (NOTE 1)
<S> <C> <C>
- ------------------------------------------------------------------------------------
Forward Foreign Exchange Contracts to Sell
522,774 Mexican Peso 01/03/95 $ (105,080)
(Contract Amount $104,555)
</TABLE>
10 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
STATEMENT of ASSETS and LIABILITIES
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (Cost $73,799,487) (Note 1)
See accompanying schedule $ 68,146,986
Cash and foreign currency (Cost $160,153) 160,221
Receivable for investment securities sold 5,017,620
Forward foreign exchange contracts to sell
See accompanying schedule 104,555
Dividends and interest receivable 31,705
Receivable for Fund shares sold 16,090
------------
TOTAL ASSETS 73,477,177
LIABILITIES
Payable for investment securities purchased $ 1,399,898
Payable for Fund shares redeemed 248,038
Forward foreign exchange contracts to sell, at value
(Contract cost $104,555) (Note 1)
See accompanying schedule 105,080
Investment management fee payable (Note 2) 81,796
Accrued Trustees' fees and expenses (Note 2) 7,013
Distribution fee payable (Note 3) 1,771
Accrued expenses and other payables 10,500
-----------
TOTAL LIABILITIES 1,854,096
------------
NET ASSETS $ 71,623,081
------------
------------
NET ASSETS consist of:
Accumulated net realized loss on investments, forward
foreign exchange contracts and foreign currency
transactions $ (748,482)
Net unrealized depreciation of investments, forward
foreign exchange contract and foreign currency (5,654,018)
Paid-in capital 78,025,581
------------
TOTAL NET ASSETS $ 71,623,081
------------
------------
NET ASSETS VALUE
INVESTOR CLASS SHARES:
Net asset value, offering and redemption price per share
($64,839,147 DIVIDED BY 4,424,392 shares of
beneficial interest outstanding) $14.65
------
------
CLASS R SHARES:
Net asset value, offering and redemption price per share
($6,783,934 DIVIDED BY 458,870 shares of beneficial
interest outstanding) $14.78
------
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 11
................................................................................
<PAGE>
STATEMENT of OPERATIONS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $24) $ 440,725
Dividends (net of foreign withholding taxes of $8,485) 421,557
-------------
TOTAL INVESTMENT INCOME 862,282
EXPENSES
Investment management fee (Note 2) $ 741,988
Investment advisory fee (Note 2) 287,144
Distribution fee (Note 3) 198,008
Transfer agent fees (Note 2) 21,874
Custodian fees (Note 2) 14,153
Trustees' fees and expenses (Note 2) 11,950
Legal and audit fees 8,422
Other 19,704
----------
TOTAL EXPENSES 1,303,243
-------------
NET INVESTMENT LOSS (440,961)
-------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(Notes 1 and 4):
Net realized gain/(loss) on:
Securities transactions (638,830)
Forward foreign exchange contracts (3,353)
Foreign currency transactions 8,550
-------------
Net realized loss on investments sold during the year (633,633)
-------------
Net change in unrealized depreciation of:
Securities (18,171,853)
Forward foreign exchange contracts (525)
Foreign currencies (992)
-------------
Net unrealized depreciation of investments during the
year (18,173,370)
-------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (18,807,003)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (19,247,964)
-------------
-------------
</TABLE>
12 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
STATEMENT of CHANGES in NET ASSETS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
12/31/94 12/31/93
<S> <C> <C>
Net investment loss $ (440,961) $ (910,845)
Net realized gain/(loss) on investments sold, forward foreign exchange
contracts and currency transactions during the year (633,633) 11,824,587
Net unrealized appreciation/(depreciation) on investments, forward foreign
exchange contracts and foreign currency during the year (18,173,370) 2,755,492
------------ ------------
Net increase/(decrease) in net assets resulting from operations (19,247,964) 13,669,234
Distributions to shareholders from net realized gains on investments:
Investor Shares (formerly Retail Class) (228,089) (7,266,384)
Institutional Class -- (1,880,791)
Class R Shares (formerly Investment Class) (28,254) (1,252,247)
Distributions to shareholders in excess of net realized gain on
investments:
Investor Shares (formerly Retail Class) (184)
Class R Shares (formerly Investment Class) (23)
Net increase in net assets from Fund share transactions (Note 5):
Investor Shares (formerly Retail Class) (21,633,955) 20,420,511
Institutional Class -- 16,949,922
Class R Shares (formerly Investment Class) (5,807,720) 13,856,229
------------ ------------
Net increase/(decrease) in net assets (46,946,189) 54,496,474
NET ASSETS:
Beginning of year 118,569,270 64,072,796
------------ ------------
End of year $ 71,623,081 $118,569,270
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 13
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH YEAR.*
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
12/31/94## 12/31/93+++ 12/31/92 12/31/91
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------
Net asset value, beginning of year $17.97 $ 16.45 $ 14.59 $ 13.56
-------- ----------- ----------- -----------
Income from investment operations:
Net investment income/(loss)# (0.09) (0.20) (0.10) (0.05)
Net realized and unrealized gain/(loss) on
investments (3.18) 3.51 3.77 3.90
-------- ----------- ----------- -----------
Total from investment operations (3.27) 3.31 3.67 3.85
Less distributions:
Distributions from net investment income -- -- -- --
Distributions in excess of net investment income -- -- (0.19) --
Distributions from net realized gains on
investments (0.05) (1.79) (1.62) (2.82)
Distributions in excess of net realized gains on
investments (0.00)(1) -- -- --
-------- ----------- ----------- -----------
Total distributions (0.05) (1.79) (1.81) (2.82)
-------- ----------- ----------- -----------
Net asset value, end of year $14.65 $ 17.97 $ 16.45 $ 14.59
-------- ----------- ----------- -----------
Total return+ (18.22)% 20.01 % 26.19 % 29.22 %
-------- ----------- ----------- -----------
-------- ----------- ----------- -----------
Ratios to average net assets/ Supplemental Data:
Net assets, end of year (in 000's) $64,839 $ 83,879 $ 64,071 $ 41,522
Ratio of operating expenses to average net
assets++ 1.42 % 1.73 % 1.57 % 1.70 %
Ratio of net investment income to average net
assets (0.51)% (1.09)% (0.71)% (0.34)%
Portfolio turnover rate++++ 133 % 94 % 112 % 141 %
------------------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1, 1993 EXISTING SHARES OF THE FUND WERE DESIGNATED THE RETAIL
CLASS AND THE FUND BEGAN OFFERING THE INSTITUTIONAL CLASS AND THE INVESTMENT
CLASS OF SHARES. EFFECTIVE APRIL 4, 1994 THE RETAIL AND INSTITUTIONAL
CLASSES WERE RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR
SHARES. THE AMOUNTS SHOWN FOR THE YEAR ENDED DECEMBER 31, 1994 WERE
CALCULATED USING THE PERFORMANCE OF A RETAIL CLASS SHARE OUTSTANDING FROM
JANUARY 1, 1994 TO APRIL 3, 1994, AND THE PERFORMANCE OF AN INVESTOR SHARE
OUTSTANDING FROM APRIL 4, 1994 TO DECEMBER 31, 1994. THE FINANCIAL
HIGHLIGHTS FOR THE YEAR ENDED DECEMBER 31, 1993 AND PRIOR YEARS ARE BASED
UPON A RETAIL CLASS SHARE OUTSTANDING.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE YEARS INDICATED.
++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES AND/OR WAIVER OF FEES BY THE
INVESTMENT ADVISER, THE ANNUALIZED RATIO OF EXPENSES TO AVERAGE NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,1993 WOULD HAVE BEEN 1.79%.
+++ PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD.
++++ IN ACCORDANCE WITH THE SECURITIES AND EXCHANGE COMMISSION'S JULY 1985 RULES
AMENDMENT, THE RATES FOR 1986 AND LATER PERIODS INCLUDE U.S. GOVERNMENT
LONG-TERM SECURITIES WHICH WERE EXCLUDED FROM THE CALCULATIONS IN PRIOR
YEARS.
# WITHOUT THE VOLUNTARY WAIVER OF FEES AND/OR REIMBURSEMENT OF EXPENSES BY
INVESTMENT ADVISER, NET INVESTMENT LOSS FOR THE FOR THE YEAR ENDED DECEMBER
31, 1993 WOULD HAVE BEEN ($0.21).
## PRIOR TO APRIL 4, 1994, THE BOSTON COMPANY ADVISORS, INC. SERVED AS THE
FUND'S INVESTMENT ADVISER. FROM APRIL 4, 1994 THROUGH OCTOBER 16, 1994,
MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT MANAGER. EFFECTIVE OCTOBER
17, 1994, THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER.
(1) AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
</TABLE>
14 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
................................................................................
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/90+++ 12/31/89 12/31/88 12/31/87 12/31/86 12/31/85
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------
$ 14.28 $ 14.27 $ 12.02 $ 17.21 $ 20.95 $ 15.87
---------- -------- -------- -------- -------- --------
0.03 0.14 0.37 0.63 0.13 0.36
(0.72) 2.49 2.22 (0.91) 1.40 5.07
---------- -------- -------- -------- -------- --------
(0.69) 2.63 2.59 (0.28) 1.53 5.43
(0.03) (0.25) (0.34) (0.81) (0.31) (0.35)
-- -- -- -- -- --
-- (2.37) -- (4.10) (4.96) --
-- -- -- -- -- --
---------- -------- -------- -------- -------- --------
(0.03) (2.62) (0.34) (4.91) (5.27) (0.35)
---------- -------- -------- -------- -------- --------
$ 13.56 $ 14.28 $ 14.27 $ 12.02 $ 17.21 $ 20.95
---------- -------- -------- -------- -------- --------
(4.84)% 18.83% 21.49% (3.81)% 7.66% 34.80%
---------- -------- -------- -------- -------- --------
---------- -------- -------- -------- -------- --------
$43,591 $39,759 $35,227 $30,678 $35,860 $53,562
1.62% 1.72% 1.58% 1.49% 1.32% 1.35%
0.19% 0.82% 2.70% 3.25% 1.16% 1.96%
222% 184% 180% 322% 192% 257%
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 15
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
FOR AN INSTITUTIONAL CLASS SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/93*+++
<S> <C>
Net asset value, beginning of period $ 17.31
----------
Income from investment operations:
Net investment loss# (0.14)
Net realized and unrealized gain on investments 2.65
----------
Total from investment operations 2.51
Less distributions:
Distributions in excess of net investment income (1.79)
----------
Net asset value, end of period $ 18.03
----------
Total return+ 15.60%
----------
----------
Ratios to average net assets/Supplemental Data:
Net assets, end of year (in 000's) $19,749
Ratio of operating expenses to average net assets++ 1.40%**
Ratio of net investment loss to average net assets (0.76)%**
Portfolio turnover rate 94%
------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1, 1993, THE FUND COMMENCED SELLING INSTITUTIONAL CLASS SHARES.
EFFECTIVE APRIL 4, 1994 THE INSTITUTIONAL AND RETAIL CLASSES WERE
RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR SHARES.
** ANNUALIZED.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES AND/OR WAIVER OF FEES BY THE
INVESTMENT ADVISER, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS FOR THE
PERIOD ENDED DECEMBER 31, 1993 WOULD HAVE BEEN 1.47%.
+++ PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD.
# WITHOUT THE VOLUNTARY WAIVER OF FEES AND/OR REIMBURSEMENT OF EXPENSES BY THE
INVESTMENT ADVISER, NET INVESTMENT LOSS FOR THE PERIOD ENDED DECEMBER 31,
1993 WOULD HAVE BEEN ($0.15).
</TABLE>
16 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
12/31/94## 12/31/93*+++
<S> <C> <C>
Net asset value, beginning of period $18.06 $ 17.31
-------- ------------
Income from investment operations:
Net investment loss# (0.02) (0.10)
Net realized and unrealized gain/(loss) on investments (3.21) 2.64
-------- ------------
Total from investment operations (3.23) 2.54
Less distributions:
Distributions from net realized gains on investments (0.05) (1.79)
Distributions in excess of net realized gains on investments (0.00)(1) --
-------- ------------
Net asset value, end of period $14.78 $ 18.06
-------- ------------
Total return+ (17.91)% 15.78%
-------- ------------
-------- ------------
Ratios to average net assets/Supplemental Data:
Net assets, end of period (in 000's) $6,784 $14,941
Ratio of operating expenses to average net assets++ 1.15% 1.19%**
Ratio of net investment income to average net assets (0.24)% (0.55)%**
Portfolio turnover rate 133% 94%
------------------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1, 1993, THE FUND COMMENCED SELLING INVESTMENT CLASS SHARES.
EFFECTIVE APRIL 4, 1994 THE INVESTMENT CLASS SHARES WERE RECLASSIFIED AS
TRUST SHARES AND ON OCTOBER 17, 1994 WERE RECLASSIFIED AS CLASS R SHARES.
** ANNUALIZED.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIODS INDICATED.
++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES AND/OR WAIVER OF FEES BY THE
INVESTMENT ADVISER, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS FOR THE
PERIOD ENDED DECEMBER 31, 1993 WOULD HAVE BEEN 1.25%.
+++ PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD.
# WITHOUT THE VOLUNTARY WAIVER OF FEES AND/OR REIMBURSEMENT OF EXPENSES BY THE
INVESTMENT ADVISER, NET INVESTMENT LOSS FOR THE FOR THE PERIOD ENDED DECEMBER
31, 1993 WOULD HAVE BEEN ($0.11).
## PRIOR TO APRIL 4, 1994, THE BOSTON COMPANY ADVISORS, INC. SERVED AS THE
FUND'S INVESTMENT ADVISER. FROM APRIL 4, 1994 THROUGH OCTOBER 16, 1994,
MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT MANAGER. EFFECTIVE OCTOBER
17, 1994, THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER.
(1) AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 17
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS
................................................................................
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds Trust (the "Trust") (formerly The Boston Company
Fund), The Dreyfus/Laurel Tax-Free Municipal Funds, The Dreyfus/Laurel Funds,
Inc. and The Dreyfus/Laurel Investment Series are all registered open-end
investment companies that are now part of The Dreyfus Family of Funds. The
Trust is an investment company which consists of four funds: Premier Limited
Term Government Securities Fund, Dreyfus Core Value Fund, Premier Managed
Income Fund and Dreyfus Special Growth Fund (the "Fund"). The Trust is a
"Massachusetts business trust" and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a diversified, open-end management investment company. On
April 4, 1994, the Retail and Institutional Classes of shares were
reclassified as a single class of shares known as the Investor Shares and the
Investment Class of shares was reclassified as the Trust Shares. On October
17, 1994, Trust Shares were redesignated as Class R Shares. Investor Shares
are sold primarily to retail investors and bear a distribution fee. Class R
Shares are sold primarily to bank trust departments and other financial
service providers (including Mellon Bank and its affiliates) acting on behalf
of customers having a qualified trust or investment account or relationship at
such institution, and bear no distribution fee. Each class of shares has
identical rights and privileges except with respect to the distribution fees
and voting rights on matters affecting a single class. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements.
(A) PORTFOLIO VALUATION:
Investments in securities traded on a national securities exchange are valued
at the last reported sales price or, in the absence of a recorded sale, at the
mean of the closing bid and asked prices. Over-the-counter securities are
valued at the mean of the closing bid and asked prices. When market quotations
for securities are not readily available, the securities are valued at fair
value, as determined in good faith by the Board of Trustees. Options are
generally valued at the last sale price or, in the absence of a last sale
price, the last bid price. Bonds are valued through valuations obtained from a
commercial pricing service or at the most recent mean of the bid and asked
prices provided by investment dealers in accordance with procedures
established by the Board of Trustees. Debt securities with maturities of 60
days or less from the valuation day are valued on the basis of amortized cost
which approximates market value. Foreign securities are generally valued at
the preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time a value was so
established is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under
the direction of the Board of Trustees or its delegates.
18
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
(B) FORWARD FOREIGN CURRENCY CONTRACTS:
The Fund uses forward foreign currency contracts to hedge risks on foreign
currency denominated transactions and holdings. The Fund generally enters into
forward contracts as a hedge, in connection with the purchase or sale of a
security denominated in foreign currency. Forward contracts may also be used
to shift portfolio currency risk, though the Fund does not employ forwards for
this purpose at the present time.
Forward foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as
an unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the Fund's investment securities, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that
might result should the value of the currency increase. In addition, the Fund
could be exposed to risks if the counterparties to the contracts are unable to
meet the terms of their contracts.
(C) FOREIGN CURRENCY:
The books and records of the Fund are maintained in United States (U.S.)
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of
the period, and purchases and sales of investment securities, income and
expenses are translated on the respective dates of such transactions.
Unrealized gains and losses which result from changes in the foreign currency
exchange rates have been included in the unrealized
appreciation/(depreciation) of investments and net other assets. Net realized
foreign currency gains and losses resulting from changes in exchange rates
include foreign currency gains and losses between trade date and settlement
date on investment securities transactions, foreign currency transactions and
the difference between the amounts of interest and dividends recorded on the
books of the Fund and the amount actually received. The portion of foreign
currency gains and losses related to fluctuation in exchange rates between the
initial purchase trade date and subsequent sale trade date is included in
realized gains and losses on investment securities sold.
(D) REPURCHASE AGREEMENTS:
The Fund may engage in repurchase agreement transactions. Under the terms of a
typical repurchase agreement, the Fund, through its custodian, takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding
period. This arrangement results in a fixed rate of return that is not subject
to market fluctuations during the Fund's holding period. The value of the
19
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
collateral is at least equal at all times to the total amount of the
repurchase obligations, including interest. In the event of counterparty
default, the Fund has the right to use the collateral to offset losses
incurred. There is potential loss to the Fund in the event the Fund is delayed
or prevented from exercising its rights to dispose of the collateral
securities including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Fund's investment manager, acting under the supervision of the
Board of Trustees, reviews the value of the collateral and the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements to evaluate potential risks.
(E) OPTION CONTRACTS:
The Fund may enter into option transactions. The Fund generally purchases put
options or writes covered call options to hedge against adverse movements in
the value of the portfolio holdings. When the Fund purchases a put option or a
call option, the premium paid is recorded as an investment, the value of which
is marked-to-market daily. When a purchased option expires, the Fund will
realize a loss in the amount of the cost of the option. When the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss
depending on whether the sales proceeds from the closing sale transaction are
greater or less than the cost of the option. When the Fund exercises a put
option, it will realize a gain or loss from the sale of the underlying
security based on the proceeds from such sale which will be decreased by the
premium originally paid. When the Fund exercises a call option, the cost of
the security which the Fund purchases upon exercise will be increased by the
premium originally paid.
When the Fund writes a call option or a put option, an amount equal to the
premium received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a
gain equal to the amount of the premium received. When the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss) if the cost
of the closing purchase transaction is less than (exceeds) the premium
received when the option was written without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
eliminated. When a call option is exercised, the Fund realizes a gain or loss
from the sale of the underlying security based on the proceeds from such sale
which are increased by the premium originally received. When a put option is
exercised, the amount of the premium originally received will reduce the cost
of the security which the Fund purchased upon exercise.
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is that the Fund may forego
the opportunity of profit if the market price of the underlying security
increases and the option is exercised. The risk in writing a put option is
that the Fund may incur a loss if the market price of the underlying security
decreases and the option is exercised. In addition, there is the risk the Fund
may not be able to enter into a closing transaction because of an illiquid
secondary market.
20
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
(F) EXPENSE ALLOCATION:
Expenses of the Fund not directly attributable to the operations of any class
of shares are prorated between the classes based upon the relative average
daily net assets of each class. Distribution expense is directly attributable
to a particular class of shares and is charged only to that class' operations.
(G) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. Realized gains or losses on sales of investments are determined on the
basis of identified cost. Investment income and realized gains and losses are
allocated based upon relative net assets of each class of shares.
(H) DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income of the Fund, if any, are determined
on a class level and are declared and paid annually. The Fund distributes any
net realized capital gains on a Fund level annually. Distributions to
shareholders are recorded on the ex-dividend date. Additional distributions of
net investment income and capital gains for the Fund may be made at the
discretion of the Board of Trustees in order to avoid the 4% nondeductible
Federal excise tax. Income distributions and capital gain distributions on a
Fund level are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various
investment securities held by the Fund, timing differences and differing
characterization of distributions made by the Fund as a whole.
(I) FEDERAL TAXES:
It is the Fund's policy to qualify as a regulated investment company, if such
qualification is in the best interest of its shareholders, by complying with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and by distributing all of its taxable income to its
shareholders. Therefore, no Federal income tax provision is required.
2. INVESTMENT MANAGEMENT FEE, TRUSTEES' FEES
AND OTHER RELATED PARTY TRANSACTIONS
Effective as of October 17, 1994, the Trust's investment management agreement
with Mellon Bank, N.A. ("Mellon Bank") was transferred to The Dreyfus
Corporation (the "Manager"), a wholly-owned subsidiary of Mellon Bank. The
Manager provides, or arranges for one or more third parties to provide,
investment advisory, administrative, custody, fund accounting and transfer
agency services to the Trust. The Manager also directs the investments of the
Fund in accordance with its investment objective, policies and limitations.
For these services, the Fund is contractually obligated to pay the Manager
21
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
a fee, calculated daily and paid monthly, at the annual rate of 1.15% of the
value of the Fund's average daily net assets. Out of its fee, the Manager pays
all of the expenses of the Fund except brokerage fees, taxes, interest, Rule
12b-1 distribution fees and expenses, fees and expenses of non-interested
Trustees (including counsel fees) and extraordinary expenses. In addition, the
Manager is required to reduce its fee in an amount equal to the Fund's
allocable portion of fees and expenses of the non-interested Trustees
(including counsel).
For the period from April 4, 1994 to October 16, 1994, Mellon Bank served as
the Trust's investment manager pursuant to the investment management agreement
described above. Prior to April 4, 1994, the Trust had an investment advisory
agreement under which the Fund paid The Boston Company Advisors Inc., a
wholly-owned subsidiary of Mellon Bank, a monthly fee at the annual rate of
1.00% of the value of its average daily net assets.
Prior to April 4, 1994, the Trust had individual contracts, which contained
specific fee provisions, with Boston Safe Deposit and Trust Company, a
wholly-owned subsidiary of Mellon Bank, and The Shareholder Services Group,
Inc. to provide custody and transfer agent services, respectively, to the
Fund. Effective April 4, 1994, the payment of fees for custody, accounting and
transfer agent services are covered by the investment management agreement
described above.
Operating expenses directly attributable to a particular class of shares are
charged only to that class' operations. In addition to the distribution fees,
gross class specific operating expenses include transfer agent fees. For the
year ended December 31, 1994, the Investor and Class R shares incurred
transfer agent fees of $21,163 and $711, respectively.
For the period from April 4, 1994 to September 23, 1994, Frank Russell
Investment Management Company (the "Administrator") served as the Fund's
administrator and provided, pursuant to an administration agreement, various
administrative and corporate secretarial services to the Fund. For the period
from April 4, 1994 to September 23, 1994, Mellon Bank, as investment manager,
paid the Administrator's fee out of the management fee described above.
Prior to October 17, 1994, the Trust had a contract with Funds Distributor,
Inc. to serve as distributor of the Trust's shares. Effective as of October
17, 1994, Premier Mutual Fund Services, Inc. ("Premier") serves as the Trust's
distributor. Premier also serves as the Trust's sub-administrator and,
pursuant to a sub- administration agreement with the Manager, provides various
administrative and corporate secretarial services to the Trust.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
thereof) receives any compensation from The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds or The
Dreyfus/Laurel Investment Series (collectively, "The Dreyfus/Laurel Funds")
for serving as an officer or Director or Trustee of The Dreyfus/Laurel Funds.
In addition, no officer or employee of
22
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
the Manager (or of any parent, subsidiary or affiliate thereof) serves as an
officer or Director or Trustee of The Dreyfus/Laurel Funds. The Dreyfus/Laurel
Funds pays each Director or Trustee who is not an officer or employee of
Premier (or of any parent, subsidiary or affiliate thereof) or of the Manager,
$27,000 per annum, $1,000 for each Board meeting attended and $750 for each
Audit Committee meeting attended, and reimburses each Director or Trustee for
travel and out-of-pocket expenses.
3. DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act relating to its Investor Shares. Under the Plan the Fund
may pay annually up to .25% of the value of the average daily net assets
attributable to its Investor Shares to compensate Premier and Dreyfus Service
Corporation, an affiliate of the Manager, for shareholder servicing activities
and to compensate Premier for activities and expenses primarily intended to
result in the sale of Investor Shares. The Class R Shares bear no distribution
fee. Prior to April 4, 1994, under a distribution plan, the Fund was
authorized to spend up to .25% and .15%, respectively, of its average daily
net assets annually on distribution expenses for the Retail Class and the
Institutional Class shares which are now reclassified as Investor Shares.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of a majority of the Trustees
and a majority of the Trustees who are not "interested persons" of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan.
4. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities, excluding short-term
investments and U.S. government securities, for the year ended December 31,
1994 were $110,193,021and $131,584,059, respectively.
At December 31, 1994, aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there is an excess
of tax cost over value were $4,672,140 and $10,324,641, respectively.
5. SHARES OF BENEFICIAL INTEREST
The Trust has the authority to issue an unlimited number of shares of
beneficial interest of four separate investment portfolios, without par value.
The Fund offers two classes of shares.
23
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
-------------------------------------------------------------------
DREYFUS SPECIAL GROWTH FUND
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
YEAR ENDED DECEMBER 31, 1993 DECEMBER 31, 1993*
DECEMBER 31, 1994** (RETAIL CLASS) (INSTITUTIONAL CLASS)
Shares+ Amount++ Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------
INVESTOR SHARES:
Sold 1,941,895 $ 32,031,183 6,976,008 $118,310,926 2,256,935 $ 40,318,781
Issued as reinvestment of
dividends and distributions 14,090 217,665 391,057 7,078,144 89,187 1,618,748
Redeemed (3,294,041) (53,882,803) (5,367,725) (83,730,470) (2,076,570) (39,279,055)
Exchanged for Institutional
shares -- -- (825,618) (14,291,448) -- --
Exchanged for Investment
shares -- -- (401,308) (6,946,641) -- --
Issued in exchange for Retail
shares -- -- -- -- 825,618 14,291,448
---------- ------------ ---------- ------------ ---------- ------------
---------- ------------ ---------- ------------ ---------- ------------
Net increase/ (decrease) (1,338,056) $(21,633,955) 772,414 $ 20,420,511 1,095,170 $ 16,949,922
---------- ------------ ---------- ------------ ---------- ------------
---------- ------------ ---------- ------------ ---------- ------------
------------------------------------------------------------------------------------
PERIOD ENDED
YEAR ENDED DECEMBER 31, 1993*
DECEMBER 31, 1994**# (INVESTMENT CLASS)
Shares Amount Shares Amount
------------------------------------------------------------------------------------
CLASS R SHARES:
Sold 82,480 $ 1,390,092 507,410 $ 8,488,854
Issued as reinvestment of
dividends and distributions 1,624 25,347 -- --
Issued in exchange for Retail
Shares -- -- 401,308 6,946,641
Redeemed (452,409) (7,223,159) (81,543) (1,579,266)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
Net increase/ (decrease) (368,305) $ (5,807,720) 827,175 $ 13,856,229
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
------------------------------------------------------------------------------------
<FN>
* THE FUND COMMENCED SELLING INSTITUTIONAL AND INVESTMENT CLASS SHARES ON
FEBRUARY 1, 1993. ANY SHARES OUTSTANDING PRIOR TO FEBRUARY 1, 1993 WERE
DESIGNATED RETAIL CLASS SHARES.
** EFFECTIVE APRIL 4, 1994, THE RETAIL AND INSTITUTIONAL CLASSES OF SHARES WERE
RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR SHARES AND THE
INVESTMENT CLASS SHARES WERE RECLASSIFIED AS TRUST SHARES.
# EFFECTIVE OCTOBER 12, 1994, THE TRUST SHARES WERE RECLASSIFIED AS CLASS R
SHARES.
+ NUMBER OF SHARES INCLUDES 157,588 OF SUBSCRIPTIONS AND 477,271 OF REDEMPTIONS
FOR THE INSTITUTIONAL CLASS UP TO APRIL 4, 1994.
++ AMOUNTS INCLUDE $2,791,543 OF SUBSCRIPTIONS AND $8,392,173 OF REDEMPTIONS
FOR THE INSTITUTIONAL CLASS UP TO APRIL 4, 1994.
</TABLE>
24
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
6. FOREIGN SECURITIES
The Fund may purchase securities of foreign issuers. Investing in securities
of foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in securities of U.S.
companies and the U.S. government. These risks include revaluation of
currencies and future adverse political and economic developments. Moreover,
securities of many foreign companies and foreign governments and their markets
may be less liquid and their prices more volatile than those of securities of
comparable U.S. companies and the U.S. government.
7. LINE OF CREDIT
The Fund and several affiliated entities participate in a $20 million line of
credit provided by Bank of America (formerly Continental Bank N.A.) under a
Line of Credit Agreement (the "Agreement") dated March 31, 1992, primarily for
temporary or emergency purposes, including the meeting of redemption requests
that otherwise might require the untimely disposition of securities. Under the
Agreement, the Fund may borrow up to the amount specified in its Borrowing
Base Certificate. Interest is payable either at the bank's Money Market Rate
or the London Interbank Offered Rate (LIBOR) plus .375% on an annualized
basis. The Fund and the other affiliated entities are charged an aggregate
commitment fee of $50,000, which is allocated equally among each of the
participants. The Agreement requires, among other provisions, each
participating fund to maintain a ratio of net assets (not including funds
borrowed pursuant to the Agreement) to aggregate amount of indebtedness
pursuant to the Agreement of no less than 4 to 1. During the year ended
December 31, 1994, the Fund did not borrow under the Agreement.
25
................................................................................
<PAGE>
INDEPENDENT AUDITORS' REPORT
................................................................................
[LOGO]
The Board of Trustees and Shareholders
The Dreyfus/Laurel Funds Trust:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the Dreyfus Special Growth Fund of
The Dreyfus/Laurel Funds Trust (formerly The Boston Company Fund) as of
December 31, 1994, and the related statement of operations, statement of
changes in net assets, and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The
statement of changes in net assets for the year ended December 31, 1993 and
financial highlights for each of the years or periods in the nine-year period
ended December 31, 1993 were audited by other auditors whose report thereon,
dated February 14, 1994, expressed an unqualified opinion on that statement
and those financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1994, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Dreyfus Special Growth Fund of The Dreyfus/Laurel Funds Trust as of December
31, 1994, the results of its operations, changes in its net assets, and the
financial highlights for the year then ended, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
February 17, 1995
26
................................................................................
<PAGE>
TAX INFORMATION (unaudited)
................................................................................
FISCAL YEAR ENDED DECEMBER 31, 1994
DREYFUS SPECIAL GROWTH FUND
During the fiscal year ended December 31, 1994, the Fund paid $256,343 of
long-term capital gains to its shareholders.
In accordance with tax law, the Fund has elected to defer the recognition of
losses occurring between October 31 and December 31 until the first day of the
following fiscal year. The amount of such deferral is $748,275 of capital
losses. These losses for tax purposes will be deemed to occur on January 1,
1995.
27
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