Dreyfus
BASIC New Jersey Municipal Money Market Portfolio
ANNUAL REPORT August 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE PORTFOLIO
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2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
10 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 Report of Independent Auditors
19 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus BASIC
New Jersey Municipal
Money Market Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus BASIC New Jersey
Municipal Money Market Portfolio, covering the 12-month period from September 1,
1999 through August 31, 2000. Inside, you'll find valuable information about how
the portfolio was managed during the reporting period, including a discussion
with the portfolio manager, Joseph Irace.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
money markets over the past year. This was primarily a result of efforts by the
Federal Reserve Board (the "Fed") to forestall potential inflationary pressures
in a fast-growing economy. The Fed raised short-term interest rates four times
during the reporting period, following two interest-rate hikes implemented in
the months before the reporting period began.
Tax-exempt money market investments were also strongly influenced by their own
unique supply-and-demand factors, including a reduction in the supply of
tax-exempt money market instruments amid strengthening demand. These forces
helped constrain the rise in tax-exempt yields relative to comparable taxable
securities, especially during the second half of the reporting period.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus BASIC New Jersey Municipal Money Market
Portfolio.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
September 15, 2000
DISCUSSION OF PERFORMANCE
Joseph Irace, Portfolio Manager
How did Dreyfus BASIC New Jersey Municipal Money Market Portfolio perform during
the period?
For the 12-month period ended August 31, 2000, the portfolio produced an
annualized yield of 3.26%. Taking into account the effects of compounding, the
portfolio provided an annualized effective yield of 3.31%.(1)
We attribute the portfolio' s performance to a strong economic environment,
rising interest rates and seasonal factors during most of the reporting period.
What is the portfolio's investment approach?
The portfolio seeks a high level of federal and New Jersey state tax-exempt
income while maintaining a stable $1.00 share price. We are especially vigilant
in our efforts to preserve capital.
In pursuing this objective, we employ two primary strategies. First, we attempt
to add value by constructing a diverse portfolio of high quality, tax-exempt
money market instruments from New Jersey tax-exempt issuers. Second, we actively
manage the portfolio's average maturity in anticipation of what we believe are
interest-rate trends and supply-and-demand changes in New Jersey's short-term
municipal marketplace.
For example, if we expect an increase in short-term supply, we may decrease the
average weighted maturity of the portfolio, which would enable us to purchase
new securities with higher yields. Yields tend to rise when there is an increase
in new-issue supply competing for investor interest. New securities are
generally issued with maturities in the one-year range, which if purchased,
would tend to lengthen the portfolio' s average weighted maturity. If we
anticipate limited new-issue supply, we may extend the portfolio's average
maturity to maintain current yields for as long as practical. At other times, we
try to maintain an average weighted maturity that reflects our view of
short-term interest-rate trends and future supply-and-demand considerations.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The portfolio was positively influenced over the past year by robust U.S.
economic growth, rising interest rates, seasonal supply-and-demand factors and a
declining supply of newly issued securities.
When the reporting period began on September 1, 1999, it had become apparent
that the pace of economic growth in the United States was more rapid than many
analysts expected. Consumer confidence was high, oil prices were bouncing back
from earlier lows and employment remained strong. These economic forces raised
concerns that long-dormant inflationary pressures might reemerge. In response,
the Federal Reserve Board raised short-term interest rates four times during the
reporting period, for an increase of 1.25%.
Tax-exempt money markets continued to be influenced by the effects of a strong
U.S. economy. As a result, yields for tax-exempt money market instruments were
generally low compared to most taxable money market instruments. This was
primarily because New Jersey and its municipalities experienced higher tax
revenues during the reporting period. As a result, their need to borrow was
curtailed which resulted in a reduced supply of securities. However, overall
demand for tax-exempt money market securities remained relatively strong because
of new wealth created by a strong economy and a rising stock market. The
combination of low supply and strong demand tended to put downward pressure on
yields.
Despite these influences, during April and May of 2000, seasonal
supply-and-demand factors helped push tax-exempt money market yields to their
highest level since 1991. That' s because many taxpayers redeemed shares of
tax-exempt money market funds to pay their income tax obligations, reducing
demand and increasing supply temporarily. We took advantage of this short-lived
yield increase by reducing the portfolio's average weighted maturity before
seasonal tax selling began. After yields rose, we extended the portfolio's
average maturity to lock in higher prevailing yields.
Toward the end of the reporting period, tax-exempt money market yields began to
decline modestly as signs of a potential economic slowdown emerged. We further
extended the portfolio' s average weighted maturity in advance of this time,
enabling us to capture higher yields.
What is the portfolio's current strategy?
Our strategy continues to involve active management of the portfolio's average
weighted maturity and asset mix according to our interest-rate and
supply-and-demand expectations. Accordingly, as of August 31, we maintained a
longer average weighted maturity than many other New Jersey tax-exempt money
market funds. This strategy was designed to help us lock in what we believe were
attractive yields during periods of low supply for newly issued securities.
In addition, when we took advantage of temporary high yields during tax season,
we created a "laddered" portfolio, in which maturities are staggered so that
current holdings mature at different times. Accordingly, we reduced our holdings
of short-term floating-rate securities and redeployed assets to municipal notes
and commercial paper. The laddered portfolio was generally designed to maintain
then prevailing yields from certain portfolio securities if interest rates fall,
while making some cash available for reinvestment in case interest rates rise
further. Of course, portfolio composition is subject to change at any time.
September 15, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-NEW JERSEY
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR
GUARANTEED BY THE FDIC OR THE U.S. GOVERNMENT. ALTHOUGH THE PORTFOLIO SEEKS TO
PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE
MONEY BY INVESTING IN THE PORTFOLIO.
The Portfolio
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
August 31, 2000
Principal
TAX EXEMPT INVESTMENTS--100.9% Amount ($) Value ($)
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NEW JERSEY--95.8%
Atlantic County Improvement Authority, Revenues
Aces Pooled Governmental Loan Program, VRDN
<S> <C> <C>
3.80% (LOC; Kredietbank) 4,000,000 (a) 4,000,000
Bayonne Municipal Utilities Authority, Sewer Revenue
(Sewer Project) 4.75%, 2/1/2001 2,800,000 2,802,237
Township of Bernards, BAN 4.625%, 8/30/2001 1,000,000 1,003,092
Burlington County, BAN:
4.50%, Series A, 2/8/2001 1,000,000 1,001,679
5.25%, 6/8/2001 447,000 448,798
City of Clifton, BAN 4.75%, Series B, 3/29/2001 1,000,000 1,002,796
Township of Freehold, BAN 4.25%, 11/10/2000 2,450,000 2,451,936
Hudson County Improvement Authority, Revenues, Essential
Purpose Pooled Governmental Loan Program, VRDN
4.10% (LOC; First Union National Bank of North Carolina) 6,400,000 (a) 6,400,000
Jersey City, BAN 4.75%, 1/12/2001 2,000,000 2,003,975
Jersey City Redevelopment Authority, MFHR, Refunding
VRDN (Dixon Mills) 3.80%, Series A (LOC; FNMA) 2,000,000 (a) 2,000,000
Borough of Little Ferry:
BAN 5%, 8/2/2001 627,000 630,191
GO Notes 5%, 8/2/2001 500,000 502,545
Township of Lumbertown, GO Notes
5.15%, 12/1/2000 (Insured; FGIC) 195,000 195,516
Middlesex County:
BAN 4.50%, 1/19/2001 3,000,000 3,005,735
GO Notes, General Improvement 4.75%, 8/1/2001 100,000 100,350
Monmouth County, GO Notes:
5%, 10/1/2000 250,000 250,131
4.75%, 7/15/2001 1,075,000 1,079,512
Monmouth County Improvement Authority, Revenues
Aces Pooled Governmental Loan Program, VRDN
3.90% (LOC; The Bank of New York) 5,350,000 (a) 5,350,000
Town of Morristown, BAN 5%, 4/30/2001 1,450,000 1,455,501
City of New Brunswick, BAN 4.85%, 8/31/2001 2,370,000 2,381,566
New Jersey Economic Development Authority:
Market Transition Facilities Revenue
5.25%, Series A, 7/1/2001 (Insured; MBIA) 1,000,000 1,007,779
Transit Revenue (Transportation Project)
5%, Series B, 5/1/2001 (Insured; FSA) 600,000 602,538
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
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NEW JERSEY (CONTINUED)
New Jersey Economic Development Authority (continued):
VRDN:
Economic Development Revenue, Refunding
(Airis Newark LLC Project) 4.15%
(Insured; AMBAC and Liquidity Facility; Kredietbank) 3,900,000 (a) 3,900,000
Revenues (U.S. Golf Association Project)
4.15% (LOC; PNC Bank) 2,400,000 (a) 2,400,000
Thermal Energy Facilities Revenue (Thermal Energy
Limited Partnership) 4.25% (LOC; Bank One Corp.) 3,000,000 (a) 3,000,000
New Jersey Educational Facilities Authority, Revenue:
CP (Princeton University) 3.70%, Series A, 12/13/2000
(Corp. Guaranty; Princeton University) 2,000,000 2,000,000
VRDN:
(Caldwell College) 4.05%, Series B
(LOC; Allied Irish Banks) 2,300,000 (a) 2,300,000
Refunding (College of New Jersey) 3.80%, Series A
(Insured; AMBAC and Liquidity Facility: Bank of Nova
Scotia and Toronto-Dominion Bank) 5,000,000 (a) 5,000,000
New Jersey Health Care Facilities Financing Authority
Revenues, Hospital Capital Asset Financing, VRDN:
4%, Series A (LOC; Chase Manhattan Bank) 2,500,000 (a) 2,500,000
4%, Series D (LOC; Chase Manhattan Bank) 3,000,000 (a) 3,000,000
New Jersey Sports and Exposition Authority, State Contract
Recreational Revenue, VRDN 4.15%, Series C
(Insured; MBIA and Liquidity Facility; Credit Suisse) 6,000,000 (a) 6,000,000
New Jersey Transit Corporation, GAN, Revenues
Series A:
4.80%, 9/1/2000 (Insured; FSA) 1,000,000 1,000,000
5%, 9/1/2000 (Insured; FSA) 1,600,000 1,600,000
5.25%, 9/1/2001 (Insured; FSA) 635,000 637,963
New Jersey Transportation Trust Fund Authority
Transportation System:
Revenues 5%, Series B, 6/15/2001 200,000 200,605
Transit Revenue, Prerefunded 6%, Series A, 6/15/2001
(Escrowed in; U.S. Government Securities) 250,000 252,839
New Jersey Turnpike Authority, Turnpike Revenue, Merlots
VRDN 4.27%, Series EEE (Insured; MBIA and Liquidity
Facility; First Union National Bank of North Carolina) 3,580,000 (a) 3,580,000
Northeast Monmouth County Regional Sewer Authority
Sewer Revenue, Refunding 4.75%, 1/18/2001 2,000,000 2,002,948
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
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NEW JERSEY (CONTINUED)
Passaic Valley Water Commission, Water Revenue,
Water Supply System 4.50%, 11/14/2000
(Liquidity Facility; PNC Bank) 1,000,000 1,001,324
Township of Pennsauken, BAN 4.68%, 6/19/2001 1,855,000 1,855,415
Port Authority of New York and New Jersey, Special Obligation
Revenue, Versatile Structure Obligation:
CP:
4%, Series A and B, 9/1/2000 (Liquidity Facility;
Bank of Nova Scotia) 385,000 385,000
3.95%, 12/12/2000 (Liquidity Facility;
Bank of Nova Scotia) 2,000,000 2,000,000
4.20%, 12/12/2000 (Liquidity Facility;
Bank of Nova Scotia) 200,000 200,000
VRDN:
4.15%, Series 4 (LOC; Landesbank Hessen) 7,500,000 (a) 7,500,000
4.15%, Series 6 (Liquidity Facility; Bank of Nova Scotia) 6,000,000 (a) 6,000,000
Rahway, BAN 4.15%, 12/20/2000 4,376,000 4,378,909
Salem County, GO Notes 5.375%, 12/1/2000 (Insured; FGIC) 265,000 265,845
Salem County Pollution Control Financing Authority, PCR
Refunding, VRDN (Public Service Electric and Gas)
4.25% (BPA; Union Bank of Switzerland and Insured; MBIA) 5,700,000 (a) 5,700,000
Somerset County GO Notes 4.375%, 12/1/2000 1,000,000 1,001,015
Somerset County Industrial Pollution Control Financing
Authority, Industrial Revenue, Refunding, VRDN (American
Cyanamid) 3.95% (LOC; American Home Products) 3,800,000 (a) 3,800,000
Township of Vernon, BAN 4.85%, 7/27/2001 2,049,000 2,057,834
Township of Woodbridge, BAN 4.625%, 7/27/2001 2,000,000 2,005,441
U.S. RELATED--5.1%
Guam Power Authority, Revenue, CP 3.95%, 10/16/2000
(Insured; AMBAC and Liquidity Facility; Kredietbank) 1,200,000 1,200,000
Puerto Rico Commonwealth Government Development Bank
CP:
4.50%, 10/27/2000 2,000,000 2,000,000
4.05%, 12/14/2000 3,000,000 3,000,000
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TOTAL INVESTMENTS (cost $123,400,938) 100.9% 123,401,015
LIABILITIES, LESS CASH AND RECEIVABLES (.9%) (1,060,667)
NET ASSETS 100.0% 122,340,348
</TABLE>
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
BAN Bond Anticipation Notes
BPA Bond Purchase Agreement
CP Commercial Paper
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
GAN Grant Anticipation Notes
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
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<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 73.5
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 14.2
Not Rated (c) Not Rated (c) Not Rated (c) 12.3
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE PORTFOLIO MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 123,400,938 123,401,015
Cash 256,695
Interest receivable 1,121,165
Prepaid expenses 2,594
124,781,469
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 32,186
Payable for investment securities purchased 2,381,566
Accrued expenses 27,369
2,441,121
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NET ASSETS ($) 122,340,348
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 122,342,176
Accumulated net realized gain (loss) on investments (1,905)
Accumulated gross unrealized appreciation on investments 77
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NET ASSETS ($) 122,340,348
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SHARES OUTSTANDING
(1 billion shares of $.001 par value Common Stock authorized) 122,342,176
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended August 31, 2000
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INVESTMENT INCOME ($):
INTEREST INCOME 4,392,260
EXPENSES:
Management fee--Note 2(a) 590,299
Shareholder servicing costs--Note 2(b) 90,582
Professional fees 18,492
Custodian fees 12,863
Registration fees 9,314
Prospectus and shareholders' reports 8,658
Directors' fees and expenses--Note 2(c) 2,228
Miscellaneous 6,117
TOTAL EXPENSES 738,553
Less--reduction in management fee due to
undertaking--Note 2(a) (206,708)
NET EXPENSES 531,845
INVESTMENT INCOME--NET 3,860,415
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($):
Net realized gain (loss) on investments 1,974
Net unrealized appreciation (depreciation) on investments 77
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,051
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,862,466
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Year Ended August 31,
-----------------------------------
2000 1999
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OPERATIONS ($):
Investment income--net 3,860,415 2,997,718
Net realized gain (loss) from investments 1,974 (400)
Net unrealized appreciation
(depreciation) of investments 77 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 3,862,466 2,997,318
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (3,860,415) (2,997,718)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 124,380,916 69,013,860
Dividends reinvested 3,736,625 2,911,992
Cost of shares redeemed (117,725,586) (78,601,601)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 10,391,955 (6,675,749)
TOTAL INCREASE (DECREASE) IN NET ASSETS 10,394,006 (6,676,149)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 111,946,342 118,622,491
END OF PERIOD 122,340,348 111,946,342
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Year Ended August 31,
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2000 1999 1998 1997 1996(a)
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PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .033 .026 .030 .031 .025
Distributions:
Dividends from investment income--net (.033) (.026) (.030) (.031) (.025)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (%) 3.32 2.62 3.01 3.17 3.38(b)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .45 .45 .45 .36 .06(b)
Ratio of net investment income
to average net assets 3.27 2.59 2.97 3.12 3.25(b)
Decrease reflected in above
expense ratios due to undertakings
by The Dreyfus Corporation .18 .20 .19 .27 .68(b)
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Net Assets, end of period ($ x 1,000) 122,340 111,946 118,622 136,553 100,248
(A) FROM DECEMBER 1, 1995 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996.
(B) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Portfolio
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC New Jersey Municipal Money Market Portfolio (the "portfolio") is a
separate non-diversified series of Dreyfus BASIC Municipal Fund, Inc. (the
" fund") which is registered under the Investment Company Act of 1940 as amended
(the "Act" ), as an open-end management investment company and operates as a
series company currently offering four series including the portfolio. The
portfolio's investment objective is to provide investors with as high a level of
current income exempt from Federal and New Jersey income tax as is consistent
with the preservation of capital and maintenance of liquidity. The Dreyfus
Corporation (the "Manager" ) serves as the portfolio's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation. Effectve March 22, 2000, Dreyfus
Service Corporation (" DSC"), a wholly-owned subsidiary of the Manager, became
the distributor of the fund's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
It is the portfolio's policy to maintain a continuous net asset value per share
of $1.00; the portfolio has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no assurance,
however, that the portfolio will be able to maintain a stable net asset value
per share of $1.00.
The portfolio' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized cost,
which has been determined by the fund's Board of Directors to represent the fair
value of the portfolio's investments.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custody agreement, the
portfolio received net earnings of $6,797 during the period ended August 31,
2000 based on available cash balances left on deposit. Income earned under this
arrangement is included in interest income.
The portfolio follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the portfolio.
(c) Dividends to shareholders: It is the policy of the portfolio to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the portfolio may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of 1986,
as amended (the "Code" ). To the extent that net realized capital gain can be
offset by capital loss carryovers, it is the policy of the portfolio not to
distribute such gain.
(d) Federal income taxes: It is the policy of the portfolio to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the The Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise taxes
The portfolio has an unused capital loss carryover of $1,905 available for
Federal income tax purposes to be applied against future net securities profits,
if any, realized subsequent to August 31, 2000. If not applied, the carryover
expires in fiscal 2007.
At August 31, 2000, 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).
NOTE 2--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .50 of 1% of the value of the portfolio's average
daily net assets and is payable monthly. The Manager has undertaken, until such
time as it gives shareholders at least 90 days' notice to the contrary, to
reduce the management fee paid by the portfolio, to the extent that the
portfolio' s aggregate expenses, exclusive of taxes, brokerage fees, interest on
borrowings and extraordinary expenses, exceed an annual rate of .45 of 1% of the
value of the portfolio's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $206,708 during the period ended
August 31, 2000.
(b) Under the Shareholder Services Plan, the portfolio reimburses DSC an amount
not to exceed an annual rate of .25 of 1% of the value of the portfolio's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the portfolio and providing reports and other
information, and services related to the maintenance of shareholder accounts
During the period ended August 31, 2000, the portfolio was charged $75,286
pursuant to the Shareholder Services Plan.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended August 31, 2000, the portfolio was charged $8,691 pursuant to the
transfer agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
The Portfolio
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors Dreyfus BASIC New Jersey Municipal Money
Market Portfolio
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus BASIC New Jersey Municipal Money Market
Portfolio (one of the Series constituting Dreyfus BASIC Municipal Fund, Inc.) as
of August 31, 2000, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Portfolio's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2000 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
audits provide 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
Dreyfus BASIC New Jersey Municipal Money Market Portfolio at August 31, 2000,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with accounting
principles generally accepted in the United States.
New York, New York /s/Ernst & Young LLP
October 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the portfolio hereby designates all the
dividends paid from investment income-net during the fiscal year ended August
31, 2000 as "exempt-interest dividends" (not subject to regular Federal and, for
individuals who are New Jersey residents, New Jersey personal income taxes).
The Portfolio
NOTES
For More Information
Dreyfus BASIC New Jersey Municipal Money
Market Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 127AR008
