<PAGE>
Premier
Small Company
Stock Fund
Annual Report
October 31, 1995
<PAGE>
Premier Small Company Stock Fund
- ---------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report for the Premier Small
Company Stock Fund for the fiscal year ended October 31, 1995. As shown later
in this letter, the year has been a rewarding one for the Fund. This letter
describes the economic market background of the Fund's latest twelve months,
provides you with the year's results, and explains the investment strategies.
Economic Environment
Inflation low, growth slow: Concerns about lagging economic growth
prompted the Federal Reserve to ease the Fed funds rate in July. This was the
first indication that the Fed was moving away from its long-standing policy
dedicated to keeping the economy free of inflation. The bond market has been
well ahead of the Federal Reserve in determining that inflation is, in fact,
under control. Long-term interest rates have fallen for 12 months and,
accordingly, bond investors have enjoyed significant capital gains.
Economic indicators remain mixed, some causing concern about possible
recession, while others point toward continued expansion. During times of
business uncertainty, attention often shifts to the consumer sector of the
economy. More particularly, to the consumer's ability to spend. And here
there are some indications that consumers are being pinched.
There is little doubt that the current economic expansion has been
productivity driven. That is, corporations have succeeded in paring expenses
from their cost of doing business. With this reduction in overhead, bottom
line profits have grown dramatically. Yet little of this corporate prosperity
has spilled over into the consumer sector of the economy. Wages and salaries
grew at under 3% over the past year, not even keeping pace with inflation.
An additional consumer concern: New job creation is at the slowest pace of
the post-World War II era. And recent retail sales reports were the weakest
since June 1991 when the economy was in recession. Also, there is worry that
the coming Holiday season will be a poor one for retailers, since
debt-burdened consumers may spend cautiously.
Yet, there are also significant signs of continued growth. Despite the
above indications of a potential slowdown in consumer spending, measures of
consumer confidence remain high. Business capital spending and home-building
activity continue to surge, providing substantial fuel for economic growth.
Business investment in durable equipment when calculated as a percentage of
Gross Domestic Product (GDP) is at a 35-year high with no sign of a letup.
No wonder industrial production is booming. And while job and wage growth is
slow, the index of hours worked (a key determinant of GDP growth and income
generation) is rising. Providing additional confidence is the fact that the
four-and-a-half year recovery has been well balanced: corporate debt issuance
has been moderate and the banking system is not overstretched.
Spurred by declining interest rates and a low level of inflation, the
stock market rallied strongly during the year. Technology and financial
stocks performed particularly well. The market's advance in the recent
quarter was broad-based.
Portfolio Overview
The Premier Small Company Stock Fund performed extremely well in the
fiscal year ending October 31, 1995. The Fund's Class A shares and Class R
shares began operations on September 2, 1994. The Fund's Class B and Class C
shares commenced operations on December 19, 1994. From November 1,
<PAGE>
1995 for Class A and Class R shares and from December 19 for Class B and
Class C shares through October 31, 1995, the Fund achieved a total return of
30.31% for its Class A shares, 37.51% for its Class B shares, 37.41% for its
Class C shares and 30.70% for its Class R shares.* Therefore, the Fund
achieved its investment objective of outperforming the Russell 2500 Index,
which rose 21.37% for the twelve month period ended October 31, 1995.**
As noted in the economic section of this report, the market environment
for equities was very favorable during the fiscal year. Inflation numbers
have remained low, the economy has grown at a moderate rate and interest
rates have been stable to declining.
The Fund invests primarily in a diversified, higher risk group of common
stocks with a market capitalization generally ranging from $500 million to
$1.5 billion. The Fund's strategy is to invest in stocks within each sector
of the benchmark that appears to have better value and earnings momentum
relative to other companies in the same sector.
The investment philosophy is that stocks with above average value and
above average earnings momentum will generate above average performance over
time. Portfolio risk in terms of sector weightings, beta and other measures
of risk, are maintained similar to the Russell 2500 Index. As of October 31,
1995, the Fund was 98% invested and maintained a cash position of about 2%.
The Fund does not employ market timing.
In the fiscal year ended October 31, 1995, the Fund benefitted from solid
performance in each sector, but investment in technology and financial stocks
were the strongest contributors.
I consider it a privilege to manage this Fund and will continue to
implement our investment process to the best of my ability.
Sincerely
James C. Wadsworth
Portfolio Manager
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B shares and Class C shares.
** Source: Frank Russell Company. Reflects the reinvestment of income
dividends and where applicable capital gain distributions. The Russell 2500
Index is a widely accepted measure of small cap stock performance.
<PAGE>
Premier Small Company Stock Fund October 31, 1995
- ---------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER SMALL COMPANY
STOCK FUND CLASS A SHARES AND CLASS R SHARES AND THE RUSSELL 2500 INDEX
<TABLE>
<CAPTION>
Premier Premier
Small Company Small Company
Stock Fund Stock Fund Russell 2500
Period (Class A Shares) (Class R Shares) Stock Index*
- --------------- ---------------- ---------------- ------------
<S> <C> <C> <C>
9/2/94 9,551 10,000 10,000
10/31/94 9,618 10,070 9,915
1/31/95 9,404 9,855 9,670
4/30/95 10,505 11,018 10,590
7/31/95 12,571 13,194 12,002
10/31/95 12,533 13,162 12,033
<FN>
*Source: The Frank Russell Company
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
- ------------------------------------------------------------------------------------------------------------------------
Class A Shares Class R Shares
- ------------------------------------------------------------------ -------------------------------------------
% Return
Reflecting
% Return Without Maximum Initial
Period Ended 10/31/95 Sales Charge Sales Charge (4.5%) Period Ended 10/31/95
- ---------------------- ------------------- -------------------- ------------------------
<S> <C> <C> <C> <C>
1 Year 30.31% 24.50% 1 Year 30.70%
From Inception (9/2/94) 26.39 21.49 From Inception (9/2/94) 26.72
</TABLE>
<TABLE>
<CAPTION>
Actual Aggregate Total Returns
- ------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
- ------------------------------------------------------------ ---------------------------------------------------------
% Return Reflecting % Return Reflecting
Applicable Contingent Applicable Contingent
% Return Deferred Sales % Return Deferred Sales
Assuming No Charge Upon Assuming No Charge Upon
Period Ended 10/31/95 Redemption Redemption * Period Ended 10/31/95 Redemption Redemption**
- ----------------------- ------------- ---------------------- -------------------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
From Inception (12/19/94) 37.51% 33.51% From Inception 37.41% 36.41%
(12/19/94)
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A
shares and Class R shares of Premier Small Company Stock Fund on 9/2/94
(Inception Date) to a $10,000 investment made in the Russell 2500 Index on
that date. For comparative purposes, the value of the Index on 8/31/94 is
used as the beginning value on 9/2/94. All dividends and capital gain
distributions are reinvested. Performance for Class B shares and Class C
shares will vary from the performance of both Class A shares and Class R
shares shown above due to differences in charges and expenses.
The Fund's performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and all other applicable fees and
expenses on Class A shares and Class R shares. The Russell 2500 Index is an
unmanaged index and is composed of the 2,500 smallest companies in the
Russell 3000 Index. The Russell 3000 Index is composed of 3,000 of the
largest U.S. companies by market capitalization. The Index does not take
into account charges, fees and other expenses. Further information relating
to Fund performance, including expense reimbursements, if applicable, is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
*Maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<PAGE>
Premier Small Company Stock Fund
- ---------------------------------------------------------------------------
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks--95.3% Value
- -------------- ------------
<S> <C> <C>
Basic Industries--6.7%
5,700 American Buldings Co+ ............................. $ 143,925
9,700 Cabot Corporation.................................. 460,750
9,500 Chesapeake Corporation of
Virginia......................................... 290,938
18,675 Clayton Homes, Inc. ............................... 490,219
7,400 Cytec Industries, Inc.+ .......................... 405,150
12,100 Federal Paper Board
Company, Inc..................................... 508,200
7,600 Medusa Corporation ................................ 190,000
4,900 Minerals Technologies, Inc. ....................... 195,387
18,600 NL Industries+ .................................... 241,800
7,900 Wellman Inc ....................................... 185,650
-------------
3,112,019
-------------
Consumer Cyclical--16.0%
9,300 Apple South, Inc. ................................. 190,650
9,000 Big B, Inc. ....................................... 132,750
7,400 Borg-Warner Automotive, Inc. ...................... 218,300
18,000 Cash America International ....................... 92,250
2,850 Clear Channel
Communications, Inc.+............................ 233,700
11,200 CompUSA Inc.+ ..................................... 428,400
7,650 Devon Group, Inc.+................................. 298,350
8,950 Dollar General Corporation ........................ 219,275
7,200 Eckerd Corporation+................................ 285,300
14,400 Fila Holding SPA .................................. 621,000
4,400 Franklin Quest Company+............................ 105,050
7,400 Gentex Corporation+................................ 164,650
6,645 Harman International
Industries, Inc.................................. 306,501
17,600 Haverty Furniture
Companies, Inc................................... 244,200
5,400 IHOP Corp + ....................................... 116,100
9,700 Infinity Broadcasting
Corporation, Cl. A +............................. 315,250
13,600 Interface Inc., Cl. A ............................. 205,700
7,900 Morrison Restaurants, Inc. ........................ 123,437
8,500 Outboard Marine Corporation ....................... 176,375
14,200 Players International Inc + ....................... 152,650
8,400 Regal Cinemas + ................................... 329,700
12,200 Rex Stores Corporation+............................ 207,400
12,400 Richfood Holdings, Inc. ........................... 310,000
3,550 Scholastic Corporation+ ........................... 219,213
15,975 Staples Inc.+ ..................................... 425,334
6,600 Stop & Shop Companies, Inc.+ ...................... 136,950
5,500 Toro Company ...................................... 158,812
11,800 Waban Inc.+ ....................................... 184,375
6,400 Wallace Computer Services ......................... 360,800
Consumer Cyclical (continued)
15,300 Warnaco Group, Cl. A. ............................. $ 355,725
17,500 Winnebago Industries, Inc. ........................ 140,000
-------------
7,458,197
-------------
Consumer Services--25.4%
10,000 Adaptec Inc.+...................................... 445,000
8,925 AGCO Corporation .................................. 399,394
8,800 AMETEK, Inc. ...................................... 155,100
5,000 Analysts International Corporation ................ 148,125
12,700 Atmel Corporation+................................. 396,875
5,600 CIDCO Inc. + ...................................... 165,900
11,500 Cypress Semiconductor
Corporation+..................................... 405,375
10,300 Danka Business Systems, ADR ....................... 345,050
11,300 Electronics For Imaging, Inc.+ .................... 929,425
9,300 ELSAG Bailey Process
Automation N.V.+................................. 253,425
14,200 First Alert, Inc.+................................. 220,100
8,500 Gateway 2000 +..................................... 283,687
4,600 Hadco Corp +....................................... 128,800
7,600 Heritage Media
Corporation, Cl. A+.............................. 210,900
6,600 In Focus Systems +................................. 216,975
20,200 Informix Corporation+.............................. 588,325
16,600 Integrated Device
Technology, Inc.+................................ 315,400
8,800 Kennametal, Inc. .................................. 273,900
7,500 Loewen Group, Inc. ................................ 300,352
13,500 NetManage + ....................................... 275,062
5,800 PHH Corporation ................................... 253,750
17,600 Pittston Services Group ........................... 484,000
4,900 Plantronics Inc. + ................................ 163,537
12,000 Quanex Corp. ...................................... 237,000
13,000 Quantum Corporation+ .............................. 225,875
11,800 Read-Rite Corporation+ ............................ 411,525
11,400 Silicon Valley Group, Inc.+ ....................... 369,075
18,000 Sotheby's Holdings, Cl. A ......................... 249,750
8,900 Sterling Software, Inc.+ .......................... 410,513
11,700 SunGard Data System, Inc.+ ........................ 321,750
16,100 Tellabs, Inc.+ .................................... 547,400
6,700 Thermedics + ...................................... 123,113
8,300 Thermo Electron + ................................. 381,800
9,100 Thiokol Corporation ............................... 315,087
10,400 VLSI Technology, Inc. + ........................... 244,400
13,000 Watts Industries, Inc., Cl. A ..................... 268,125
6,050 Zebra Technologies
Corporation, Cl. A+.............................. 359,975
-------------
11,823,845
-------------
</TABLE>
<PAGE>
Premier Small Company Stock Fund
- ---------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks (continued) Value
- -------------- ------------
<S> <C> <C>
Consumer Staples--3.6%
4,400 Avid Technology+ .................................. $ 192,500
12,900 Dimon Corp ........................................ 188,663
12,400 IBP, Inc. ......................................... 742,450
5,200 Lancaster Colony Corporation ...................... 172,900
15,800 Morningstar Group+ ................................ 122,450
9,800 Robert Mondavi Corporation,
Cl. A +.......................................... 276,850
-------------
1,695,813
-------------
Electronics--.5%
11,650 ECI Telecommunications, Ltd. ...................... 221,350
-------------
Energy--5.3%
18,400 Benton Oil & Gas+ ................................. 223,100
7,000 Holly Corp ........................................ 152,250
7,000 KN Energy, Inc. ................................... 179,375
22,400 Nabors Industries+ ................................ 193,200
18,500 Pacific Enterprises Company ....................... 457,875
6,300 Petroleum Geo-Services
Corporation, ADS+................................ 122,062
9,700 Pogo Producing Company ............................ 195,213
9,700 Seagull Energy Corporation+ ....................... 166,113
10,500 Smith International, Inc.+ ........................ 168,000
15,500 Southwestern Energy Company ....................... 193,750
10,400 Valero Energy ..................................... 245,700
6,300 WICOR Inc. ....................................... 186,637
-------------
2,483,275
-------------
Finance Companies--.5%
11,300 Franchise Finance Corp. of
America.......................................... 238,713
-------------
Health Care--8.6%
4,600 Cardinal Health, Inc. ............................. 236,325
6,500 Community Health Sytems, Inc.+ .................... 206,375
3,900 Cordis Corporation+ ............................... 430,950
11,600 Lincare Holdings, Inc.+ ........................... 288,550
12,000 MediSense + ....................................... 256,500
21,100 OrNda Healthcorp+ ................................. 371,888
4,400 PacifiCare Health Systems,
Cl. B +.......................................... 320,100
15,000 Teva Pharmaceutical
Industries, ADR.................................. 588,750
7,800 Universal Health Services,
Cl. B +.......................................... 292,500
10,324 Vencor + .......................................... 286,491
11,000 Vivra Inc.+ ....................................... 363,000
8,216 Watson Pharaceutical + ............................ 367,666
-------------
4,009,095
-------------
Insurance--1.0%
12,700 Mutual Risk Management, Ltd. ...................... $ 468,313
-------------
Interest Sensitive--16.7%
4,900 ADVANTA Corporation, Cl. B ........................ 175,175
4,900 AMBAC, Inc. ....................................... 206,412
12,400 AMRESCO, Inc. ..................................... 131,750
5,100 BayBanks Inc. ..................................... 413,100
6,200 CMAC Investment ................................... 294,500
2,900 Columbia First Savings Bank+ ...................... 169,650
6,100 Crestar Financial Corporation ..................... 347,700
5,800 Cullen Frost Bankers .............................. 295,800
9,350 Edwards (AG) Inc. ................................. 238,425
5,200 First Tennessee National .......................... 278,200
12,200 Firstar ADR ....................................... 431,575
12,400 Green Tree Financial
Corporation...................................... 330,150
9,350 Health Care Properties
Investors, Inc................................... 316,731
5,600 Kimco Realty ...................................... 206,500
9,000 Mercantile Bancorp, Inc. .......................... 396,000
6,400 Money Stores, Inc. ................................ 256,000
7,820 Old Kent Financial Corporation .................... 299,115
11,600 Old Republic International
Corporation...................................... 332,050
16,900 Peoples Bank of Bridgeport ........................ 333,775
4,900 PXRE Corporation .................................. 124,950
4,900 RCSB Financial Corp ............................... 109,025
9,300 Regions Financial Corp ............................ 370,837
29,600 Reliance Group Holdings ........................... 218,300
14,100 Signet ............................................ 334,875
4,150 Standard Federal
Bancorporation................................... 147,325
11,600 United Companies Financial
Corporation...................................... 327,700
9,550 USLIFE Corporation ................................ 272,175
10,500 West One Bancorp................................... 446,250
-------------
7,804,045
-------------
Mining and Metals--2.4%
9,200 Brush Wellman, Inc. ............................... 154,100
10,000 IMCO Recycling, Inc. ............................. 215,000
10,400 Potash Corporation
Saskatchewan, Inc................................ 724,100
-------------
1,093,200
-------------
Retail--.7%
20,000 Intimate Brands + ................................. 335,000
-------------
</TABLE>
<PAGE>
Premier Small Company Stock Fund
- ---------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Shares Common Stocks (continued) Value
- -------------- ------------
<S> <C> <C>
Transportation--1.7%
5,700 Air Express International ......................... $ 118,275
21,500 Arkansas Best Corporation ........................ 196,188
6,700 Illinois Central, Ser. A .......................... 256,275
13,600 SkyWest Inc........................................ 232,900
-------------
803,638
-------------
Utilities--6.2%
17,000 California Energy + ............................... 308,125
13,250 DQE, Inc. ......................................... 364,375
17,900 Frontier Corp...................................... 483,300
11,800 Illinova Corporation .............................. 334,825
18,800 LCI International, Inc.+ .......................... 338,400
20,254 MidAmerican Energy ................................ 324,064
16,100 Pinnacle West Capital
Corporation..................................... 442,749
8,000 Southern Indiana Gas &
Electric Company................................. 270,000
-------------
2,865,838
-------------
TOTAL COMMON STOCKS
(Cost $40,607,472)............................... 44,412,341
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -------------
<S> <C> <C>
REPURCHASE
AGREEMENT--6.3%
$2,960,344 Agreement with Goldman
Sachs & Company Tri Party
Repurchase Agreement,
dated 10/31/95 bearing
5.88% to be repurchased at
$2,960,028 on 11/1/95,
collateralized by $2,960,304
U.S. Treasury Note,
5.875% due 7/31/97
(Cost $2,960,344).................................. $ 2,960,344
-------------
TOTAL INVESTMENTS
(Cost $43,567,816).................................. 101.6% $47,372,685
LIABILITIES, LESS CASH AND
RECEIVABLES............................. (1.6%) (751,099)
------ -------------
NET ASSETS ........................................... 100.0% $46,621,586
------ -------------
<FN>
Note to Statement of Investments;
- ----------------------------------------------------------------------
+ Non-income producing security.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Small Company Stock Fund
- ----------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value (cost $43,567,816)--see Statement of
Investments (including repurchase agreements of $2,960,344)........... $47,372,685
Cash.................................................................... 2,560
Receivable for investment securities sold............................... 532,727
Receivable for Capital Stock sold....................................... 76,963
Dividends and interest receivable....................................... 35,666
-------------
48,020,601
LIABILITIES:
Due to The Dreyfus Corporation--Note 2(a)............................... $ 89,893
Due to Distributor--Note 2(b)........................................... 1,132
Payable for investment securities purchased............................. 1,294,327
Payable for Capital Stock redeemed...................................... 9,857
Directors' fees payable--Note 2(c)...................................... 3,806 1,399,015
----------- -------------
NET ASSETS.................................................................. $46,621,586
-------------
-------------
REPRESENTED BY:
Paid-in capital......................................................... $41,144,301
Accumulated undistributed investment income--net........................ 17,573
Accumulated undistributed net realized gain on investments.............. 1,654,843
Accumulated net unrealized appreciation on investments--Note 3.......... 3,804,869
-------------
NET ASSETS at value......................................................... $46,621,586
-------------
-------------
NET ASSET VALUE, per share:
Class A Shares
(27 million shares of $.001 par value Capital Stock authorized)
($1,358,723 / 103,808 shares of Capital Stock outstanding)............ $13.09
-------
-------
Class B Shares
(50 million shares of $.001 par value Capital Stock authorized)
($1,025,034 / 78,535 shares of Capital Stock outstanding)............. $13.05
-------
-------
Class C Shares
(50 million shares of $.001 par value Capital Stock authorized)
($146,860 / 11,259 shares of Capital Stock outstanding)............... $13.04
-------
-------
Class R Shares
(41 million shares of $.001 par value Capital Stock authorized)
($44,090,969 / 3,366,367 shares of Capital Stock outstanding)......... $13.10
-------
-------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Small Company Stock Fund
- -------------------------------------------------------------------------
Statement of Operations Year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Cash dividends........................................................ $ 263,784
Interest.............................................................. 97,514
------------
Total Income...................................................... $ 361,298
Expenses:
Investment management fee-Note 2(a)................................... 278,575
Directors' fees and expenses-Note 2(c)................................ 3,511
Distribution fee-Note 2(b)............................................ 4,034
Service Fee-Note 2(b)................................................. 838
------------
Total Expenses.................................................... 286,958
------------
INVESTMENT INCOME-NET............................................. 74,340
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 3:
Net realized gain on investments........................................ $1,683,118
Net unrealized appreciation on investments.............................. 3,736,077
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 5,419,195
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $5,493,535
------------
------------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Small Company Stock Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------
1995 1994(1)
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 74,340 $ 18,644
Net realized gain (loss) on investments.............................. 1,683,118 (28,275)
Net unrealized appreciation on investments for the year.............. 3,736,077 68,792
-------------- --------------
Net Increase In Net Assets Resulting From Operations............. 5,493,535 59,161
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A Shares..................................................... (550) --
Class R Shares..................................................... (74,861) --
-------------- --------------
Total Dividends.................................................. (75,411) --
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares.................................................... 1,410,579 59,219
Class B Shares..................................................... 967,580 --
Class C Shares..................................................... 149,491 --
Class R Shares..................................................... 36,992,799 13,289,944
Dividends reinvested:
Class A Shares..................................................... 406 --
Class R Shares..................................................... 54,591 --
Cost of shares redeemed:
Class A Shares..................................................... (272,564) (300)
Class B Shares..................................................... (9,877) --
Class R Shares..................................................... (8,896,002) (2,601,565)
-------------- --------------
Increase In Net Assets From Capital Stock Transactions........... 30,397,003 10,747,298
-------------- --------------
Total Increase In Net Assets................................... 35,815,127 10,806,459
NET ASSETS:
Beginning of year.................................................... 10,806,459 --
-------------- --------------
End of year (including undistributed investment income-net:
$17,573 and $18,644, respectively)................................. $46,621,586 $10,806,459
-------------- --------------
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
Shares
----------------------------------------------------------------------------------
Class B Class C
Class A Shares Shares Shares Class R Shares
----------------------- --------- ---------- -------------------------
Year Ended Year Ended
Year Ended October 31, October 31, October 31, Year Ended October 31,
----------------------- ---------- ---------- -------------------------
1995 1994(1)(2) 1995(3) 1995(4) 1995 1994(1)(2)
---------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold................ 120,861 5,966 79,297 11,259 3,154,920 1,330,335
Shares issued for dividends
reinvested............... 38 -- -- -- 5,116 --
Shares redeemed............ (23,027) (30) (762) -- (861,037) (262,967)
----------- -------- ------ ------- --------- ---------
Net Increase in Shares
Outstanding............ 97,872 5,936 78,535 11,259 2,298,999 1,067,368
----------- -------- ------ ------- --------- ---------
----------- -------- ------ ------- --------- ---------
<FN>
- ------------
(1) The Fund commenced operations on September 2, 1994.
(2) Effective October 17, 1994, the Fund's Investor shares and Trust shares
were redesignated as Class A shares and Class R shares, respectively.
(3) The Fund commenced selling Class B shares on December 19, 1994.
(4) The Fund commenced selling Class C shares on April 30, 1995.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Small Company Stock Fund
- --------------------------------------------------------------------------
Financial Highlights
Contained below is per share performance data for a share of Capital
Stock outstanding, total investment return, ratios to
average net assets and other supplemental data for each period indicated.
This information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares Class B Shares
------------------------ ----------------------
Year Ended October 31, Year Ended October 31,
------------------------ ----------------------
PER SHARE DATA: 1995 1994(1)(2) 1995(3)
-------- ---------- --------
<S> <C> <C> <C>
Net asset value, beginning of year.............. $10.07 $10.00 $ 9.49
------ ------ ------
Investment Operations:
Investment income (loss)-net.................... .02 .01 (.03)
Net realized and unrealized gain on investments. 3.03 .06 3.59
------ ------ ------
Total from Investment Operations.............. 3.05 .07 3.56
------ ------ ------
Distributions;
Dividends from investment income-net............ (.03) -- --
------ ------ ------
Net asset value, end of year.................... $13.09 $10.07 $13.05
------ ------ ------
------ ------ ------
TOTAL INVESTMENT RETURN............................. 30.31% .70% 37.51%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... 1.50% 1.50%(4) 2.25%(4)
Ratio of net investment income to average net assets .10% .83%(4) (.65%)(4)
Portfolio Turnover Rate......................... 56.00% 8.00% 56.00%
Net Assets, end of year (000's Omitted)......... $1,359 $60 $1,025
<FN>
- -------------
(1) The Fund commenced operations and commenced selling Class A shares on
September 2, 1994. Effective October 17, 1994, the Fund's Investor shares
were redesignated as Class A shares.
(2) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager.
(3) The Fund commenced selling Class B shares on December 19, 1994.
(4) Annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Small Company Stock Fund
- ------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share performance data for a share of Capital Stock
outstanding, total investment return, ratios to
average net assets and other supplemental data for each period indicated.
This information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class C Shares Class R Shares
--------------------- ------------------------
Year Ended October 31, Year Ended October 31,
--------------------- ------------------------
PER SHARE DATA: 1995(1) 1995 1994(2)(3)
------ ------ --------
<S> <C> <C> <C>
Net asset value, beginning of year.............. $ 9.49 $10.07 $10.00
------ ------ ------
Investment Operations:
Investment income (loss)-net.................... (.01) .04 .02
Net realized and unrealized gain on investments. 3.56 3.04 .05
------ ------ ------
Total from Investment Operations.............. 3.55 3.08 .07
------ ------ ------
Distributions;
Dividends from investment income-net............ -- (.05) --
------ ------ ------
Net asset value, end of year.................... $13.04 $13.10 $10.07
------ ------ ------
------ ------ ------
TOTAL INVESTMENT RETURN............................. 37.41% 30.70% .70%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... 2.25%(4) 1.25% 1.25%(4)
Ratio of net investment income to average net assets (.65%)(4) .35% 1.08%(4)
Portfolio Turnover Rate......................... 56.00% 56.00% 8.00%
Net Assets, end of year (000's Omitted)......... $ 147 $44,091 $10,747
- ---------------
<FN>
(1) The Fund commenced selling Class C shares on April 30, 1995.
(2) The Fund commenced operations and commenced selling Trust shares on
September 2, 1994. Effective October 17, 1994, the Fund's Trust shares were
redesignated as Class R shares.
(3) Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager. Prior to October 17, 1994, Mellon Bank, N.A. served as
the Fund's investment manager.
(4) Annualized.
</TABLE>
See notes to financial statments.
<PAGE>
Premier Small Company Stock Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering
sixteen Series including the Premier Small Company Stock Fund (the "Fund").
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc.
The Fund currently offers four classes of shares: Class A, Class B, Class
C and Class R shares. Class A, Class B and Class C shares are sold primarily
to retail investors through financial intermediaries and bear a distribution
fee and/or service fee. Class A shares are sold with a front-end sales
charge, while Class B and Class C shares are subject to a contingent deferred
sales charge ("CDSC") and a service 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 or service fee. Class R shares are offered
without a front-end sales load or CDSC. Each class of shares has identical
rights and privileges, except with respect to distribution fees and voting
rights on matters affecting a single class. The Company has the authority to
issue 25 billion shares of capital stock with a par value of $.001.
Investment income, net of expenses (other than class specific expenses)
and realized and unrealized gains and losses are allocated daily to each
class of shares based upon the relative proportion of net assets of each
class.
(a) Portfolio Valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued to the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors.
(b) Securities Transactions and Investment Income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(c) Repurchase Agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund,
through its custodian, and sub-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
<PAGE>
Premier Small Company Stock Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
fluctuations during the Fund's holding period. The value of the
collateral is at least equal, at all times, to the total amount of the
repurchase obligations, including interest. In the event of a 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 manager, acting under the supervision of the Board of
Directors, 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.
(d) Distributions to Shareholders: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net and dividends from net
realized capital gain are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the distributio
n requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
On November 2, 1995, the Board of Directors declared dividends from net
investment income for the Class R shares in the amount of $0.0053 per share
payable on November 3, 1995 to shareholders of record on November 2, 1995.
(e) Federal Income Taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2 -- Investment Management Fee and Other Transactions with Affiliates:
(a) Investment Management Fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. 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 a fee, calculated daily
and paid monthly, at the annual rate of 1.25% of the value of the Fund'
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 Directors
(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 Directors (including
counsel).
(b) Distribution and Service Plan: The Fund has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .75% of the value of the average daily net assets of Class B
<PAGE>
Premier Small Company Stock Fund
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
and Class C shares. Class B and Class C shares are also subject to a
service plan adopted pursuant to Rule 12b-1, pursuant to which the Fund pays
Dreyfus Service Corporation or the Distributor for providing certain services
to the holders of Class B and Class C shares a fee at the annual rate of .25%
of the value of the average daily net assets of Class B and Class C shares.
Class R shares bear no service or distribution fee. For the year ended
October 31, 1995, the service fee for Class B and Class C shares was $810 and
$28, respectively. For the year ended October 31, 1995, the distribution fee
for Class A, Class B and Class C shares was $1,521, $2,429 and $84,
respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of the majority of
those Directors who are not "interested persons" of the Company and who have
no direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan.
(c) Directors' Fees: Each director who is not an "interested
person" as defined in the Act receives $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee attended and is
reimbursed for travel and out-of-pocket expenses. These expenses are paid in
total by the following funds: the Dreyfus/Laurel Funds, Inc., the
Dreyfus/Laurel Tax-Free Municipal Funds, and the Dreyfus/Laurel Funds Trust.
In addition the Chairman of the Board receives an annual fee of $75,000 per
year. These fees and expenses are charged and allocated to each series based
on net assets.
NOTE 3 -- Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
other than short-term securities, during the year ended October 31, 1995,
amounted to $41,314,168 and $12,359,506, respectively.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $3,804,869, consisting of $5,803,153 gross unrealized
appreciation and $1,998,284 gross unrealized depreciation.
At October 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Premier Small Company Stock Fund
- -------------------------------------------------------------------------
Independent Auditors' Report
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of
the Premier Small Company Stock Fund of The Dreyfus/Laurel Funds, Inc.,
including the statement of investments, as of October 31, 1995, and the
related statement of operations for the year then ended, and the statement of
changes in net assets and the financial highlights for each of the periods
indicated herein. 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.
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 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 October 31, 1995, 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 Premier Small Company Stock Fund of The Dreyfus/Laurel Funds,
Inc., as of October 31, 1995, and the results of its operations for the year
then ended, and the changes in its net assets and the financial highlights
for each of the periods indicated herein, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
December 15, 1995
<PAGE>
Premier Small Company Stock Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Administrator
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Transfer Agent &
Dividend Disbursing Agent
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 253AR9510
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER SMALL COMPANY STOCK FUND CLASS A SHARES AND
CLASS R SHARES AND THE RUSSELL 2500 INDEX
EXHIBIT A:
____________________________________________________________
| | PREMIER | PREMIER | |
| | SMALL COMPANY | SMALL COMPANY |RUSSELL |
| PERIOD | STOCK FUND | STOCK FUND | 2500 |
| |(CLASS A SHARES) | (CLASS R SHARES) | INDEX* |
|-----------|--------------------| -----------------|--------|
| 9/2/94 | 9,551 | 10,000 | 10,000 |
| 10/31/94 | 9,618 | 10,070 | 9,915 |
| 1/31/95 | 9,404 | 9,855 | 9,670 |
| 4/30/95 | 10,505 | 11,018 | 10,590 |
| 7/31/95 | 12,571 | 13,194 | 12,002 |
| 10/31/95 | 12,533 | 13,162 | 12,033 |
|-----------|--------------------| -----------------|--------
*Source: The Frank Russell Company
