<PAGE>
Dreyfus
Growth and
Income Fund, Inc.
Annual Report
October 31, 1997
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
It is a pleasure for me to introduce the new manager of the Dreyfus Growth
and Income Fund, Inc.: Douglas D. Ramos, who took over the Fund's management in
July. As he explains in the following letter, Doug brings a new viewpoint to
carrying out his responsibilities for managing this Fund on your behalf.
Before coming to Dreyfus, Doug served 12 years at Loomis, Sayles & Co. in
Pasadena, CA where he managed $1.9 billion in equity assets including the equity
portion of balanced funds, and set allocation policy for one of their major
funds. Earlier Doug was a portfolio manager and analyst at Lloyd's Bank. He
began his career with Manufacturers Hanover Trust as an analyst, after
graduating from the University of Rhode Island. He is a Chartered Financial
Analyst (CFA) and a Chartered Investment Counselor (CIC).
At Dreyfus, Doug Ramos has been named a senior vice president, senior equity
portfolio manager and head of growth and income equities.
We have great confidence in Doug's ability to pursue rewarding returns for
your investment in Dreyfus Growth and Income Fund.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
Chief Investment Officer
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
As the new portfolio manager of Dreyfus Growth and Income Fund, I am
reporting in this letter on the activities of the Fund for its full fiscal year,
which ended October 31, 1997. My management has extended over the last four
months, July through October.
For the 12-month period, the Fund, which has in the past contained fixed
income securities as well as common stocks, produced a total return of 12.97%,*
while the Standard & Poor's 500 Composite Stock Price Index -- composed only of
common stocks -- had a total return of 32.10%.**
Two major factors -- the Fund's cash positions and convertible securities --
caused the Fund's performance to lag during the first six months of the fiscal
year and continued to hinder returns during the second half of the fiscal year.
Changes have been made to the portfolio to address this situation, and they will
be discussed later in this letter.
Economic Review
The U.S. economy has registered a step-up in growth in 1997 and the evidence
coming in suggests that momentum is still building. Stronger growth this year
has helped keep corporate profits buoyant despite a substantially tighter labor
market. This is because nationwide shortages of labor have so far not generated
much wage inflation. Moreover, price inflation has decelerated markedly during
the year, suppressed by the strong dollar, import competition and continued
disinflation in health care.
Although the Federal Reserve Board (the "Fed") has held a tightening bias
since mid-1996, the central bank has raised interest rates only once this year.
Expectations for further hikes have been continually postponed. They were first
dampened by the surprising drop in this year's price inflation, and more
recently by unfolding crises in foreign economies. Both events have helped to
cap short-term rates and to pull long-term interest rates lower since the
spring.
Real Gross Domestic Product growth accelerated to about 4% this year from 3%
in 1996. Virtually all economic sectors have been strong so far. Consumer
spending has been supported by rising real incomes. Capital spending has been
very robust and new orders imply continued strength. Even housing demand,
typically slowing at this phase of the business cycle, has reached new highs.
Most incoming signals support sustained fast growth. The exception is that
exporters' new orders have marginally slowed in recent months, indicating that
economic turmoil overseas may be impacting this sector. By contrast, imports
have been very robust and, if their growth is sustained, could help mitigate the
economic weakness abroad.
Overall corporate profits have continued to trend higher, although some
companies have been hurt by events overseas and the stronger dollar.
Domestically generated profits have typically remained solid, helped by strong
growth and contained wages.
Market Overview
Even though the equity markets stumbled badly in late October, the fiscal
year ended October 31, 1997 saw solid gains. For the same 12 months, measured by
price changes alone, excluding income, the Dow Jones Industrial Average gained
23.58%, the Standard & Poor's 500 Stock Index 29.96%, the Nasdaq Composite
30.43% and the Russell 2000, 27.52%. These were the gains after the drop of the
last week in October, and before counting the rebound that occurred in the first
week of November.
In retrospect, it is apparent that stock valuations had been riding for a
fall. There was weakness in March when the Fed raised interest rates for the
first time in two years. By early summer, equity prices recovered and soared to
new highs. Then, however, some nervousness set in, related mainly to concern
about high stock valuations and fears of another Fed move to
<PAGE>
cool off the bubbling economy. Weakness was apparent mainly in companies with
large capitalization, while smaller companies, such as those listed in the
Russell 2000 Index, gained ground.
As autumn leaves began to turn, the stock market as a whole regained its wind
- -- but not for long. The relatively high valuations that had prevailed were
vulnerable to any major unpleasant surprise. That came in late October from an
unexpected source -- the Far East. Severe market setbacks in Hong Kong and
Southeast Asia, together with drops in their foreign exchange rates, triggered
the fall in the U.S. market.
The market drop in Asia was caused by serious fundamental problems of excess
productive capacity, overvalued real estate and a banking system crisis.
European markets, of course, reacted to the Asian weakness, but fell less
severely because their economies are more stable. In the U.S., the sharp price
drop, followed by a vigorous rebound, reflected an economy with much greater
underlying strength.
The American investing public appears to be convinced that equities are a
good place to put money for the long term when their prices are attractive,
despite the recent volatility of the market averages.
PORTFOLIO FOCUS
Two of the factors that contributed to the Fund's lagging performance -- the
convertible securities and high cash levels -- have for the most part been
addressed. As of this writing, most of the convertibles have been sold and the
proceeds have been reinvested into common stocks; the cash levels have been
brought down to a minimal level. Going forward, the Fund will be primarily
focused on investments in companies whose prospects for earnings growth are
above average and whose common stock is selling at below-average price-earnings
ratios. For the year, the Fund's exposure to small and middle capitalization
stocks was a drag on performance, but more recently this has become a positive
factor for performance. In the final analysis, stock selection was the major
determinant of performance.
Going forward, we will increase our focus in the vital area of stock
selection. The new equity process we have implemented in this Fund is a major
step in that direction. In our previous correspondence we have discussed this
change and will continue to keep you apprised of its progress.
We are grateful for the opportunity to invest your capital and will be
working diligently on your behalf in an attempt to achieve satisfying long-term
investment results.
Sincerely,
/s/ Douglas Ramos
Douglas Ramos
Portfolio Manager
November 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. Unlike the
Fund, which can engage in a variety of investment techniques, the Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of
stock market performance, which is composed of only equity securities.
<PAGE>
Dreyfus Growth and Income Fund, Inc. October 31, 1997
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
GROWTH AND INCOME FUND, INC.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[INSERT CHART PLOT POINTS HERE]
$25,423
Standard & Poor's 500
Composite Stock
Price Index*
$21,362
Dreyfus Growth
and Income Fund
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
One Year Ended Five Years Ended From Inception (12/31/91)
October 31, 1997 October 31, 1997 to October 31, 1997
------------------- ------------------- -------------------------
<S> <C> <C> <C>
12.97% 13.67% 13.88%
<FN>
- -------------------------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Growth and
Income Fund, Inc. on 12/31/91 (Inception Date) to a $10,000 investment made in
the Standard & Poor's 500 Composite Stock Price Index on that date. All
dividends and capital gain distributions are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. Unlike the Fund, which can invest in both equity
and debt securities, the Standard & Poor's 500 Composite Stock Price Index is a
widely accepted, unmanaged index of overall stock market performance comprised
solely of common stocks. 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.
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments October 31, 1997
<TABLE>
<CAPTION>
Common Stocks--84.1% Shares Value
- ------------------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
Commercial Services--.9% Cognizant..................................... 450,000 $ 17,634,375
---------------
Consumer Durables--1.8% Leggett & Platt............................... 842,700 35,182,725
---------------
Consumer Non-Durables--5.7% Archer-Daniels-Midland........................ 1,563,000 34,776,750
Deans Foods................................... 34,100 1,613,356
Kimberly-Clark................................ 739,000 38,381,812
Philip Morris Cos............................. 859,000 34,037,875
---------------
108,809,793
---------------
Consumer Services--2.4% Carnival, Cl. A............................... 941,000 45,638,500
---------------
Electronic Technology--13.9% Adaptec....................................... 449,500(a) 21,772,656
Applied Materials............................. 100,000 3,337,500
Boeing........................................ 671,000 32,124,125
General Motors, Cl. H......................... 250,000 15,812,500
Intel......................................... 415,000 31,955,000
Lockheed Martin............................... 371,000 35,268,188
Micron Technology............................. 751,000 20,136,188
Sundstrand.................................... 662,000 35,996,250
Thiokol....................................... 80,000 7,325,000
3Com.......................................... 703,000 29,130,563
United Technologies........................... 479,000 33,530,000
---------------
266,387,970
---------------
Energy Minerals--3.4% Amerada Hess.................................. 30,000 1,843,125
Occidental Petroleum.......................... 400,000 11,150,000
Pennzoil...................................... 225,000 16,650,000
Tosco......................................... 1,080,000 35,640,000
---------------
65,283,125
---------------
Finance--13.1% BankBoston.................................... 454,000 36,802,375
CBL & Associates Property..................... 400,000 9,650,000
Chase Manhattan............................... 341,000 39,342,875
Chubb ........................................ 100,000 6,625,000
Fannie Mae.................................... 727,000 35,214,063
First Union................................... 500,500 24,555,781
Fleet Financial Group......................... 576,000 37,044,000
Freddie Mac................................... 1,180,000 44,692,500
General Re.................................... 50,000 9,859,375
Trenwick Group................................ 185,566 6,471,614
---------------
250,257,583
---------------
Health Services--3.4% Beverly Enterprises........................... 2,295,000(a) 34,281,563
PacifiCare Health Systems, Cl. B.............. 467,800(a) 30,290,050
---------------
64,571,613
---------------
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1997
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
Health Technology--3.6% ALPHARMA (Rights)............................. 110,000(a) $ 618,750
American Home Products........................ 400,000 29,650,000
Biogen........................................ 1,044,000(a) 34,974,000
Genzyme General Division...................... 150,000 4,106,250
---------------
69,349,000
---------------
Industrial Services--.5% ENI, A.D.S.................................... 150,000 8,456,250
---------------
Non-Energy Minerals--1.6% Edperbrascan, Cl. A........................... 1,200,000 21,000,000
Georgia-Pacific............................... 120,000 10,177,500
---------------
31,177,500
---------------
Process Industries--4.9% duPont (EI) de Nemours........................ 633,000 36,001,875
Great Lakes Chemical.......................... 864,000 40,608,000
Westinghouse Electric......................... 300,000 7,931,250
Witco......................................... 200,000 8,700,000
---------------
93,241,125
---------------
Producer Manufacturing--12.1% AlliedSignal.................................. 876,000 31,536,000
Armstrong World Industries.................... 525,000 34,945,312
Deere & Co.................................... 350,000 18,418,750
Emerson Electric.............................. 289,103 15,159,839
General Signal................................ 945,000 37,918,125
Industrial Flexible Material.................. 725,000(a,e) --
Masco......................................... 187,200 8,213,400
Raychem....................................... 125,000 11,320,312
Tyco International............................ 964,394 36,405,874
Xerox ........................................ 481,300 38,173,106
---------------
232,090,718
---------------
Retail Trade--6.4% General Nutrition............................. 1,298,000(a) 40,887,000
OfficeMax..................................... 3,350,000(a) 44,806,250
Sunglass Hut International.................... 1,456,300(a) 11,650,400
Wal-Mart Stores............................... 700,000 24,587,500
---------------
121,931,150
---------------
Transportation--2.0% AMR........................................... 210,800(a) 24,545,025
Canadian Pacific.............................. 450,000 13,415,625
---------------
37,960,650
---------------
Utilities--8.4% Coastal....................................... 578,000 34,752,250
Duke Energy................................... 450,000(a) 21,712,500
GTE........................................... 600,000 25,462,500
SBC Communications............................ 200,000(a) 12,725,000
Telecommunicaiones Brasileiras, A.D.R......... 322,000 32,683,000
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1997
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
Utilities (continued) Texas Utilities............................... 200,000 $ 7,175,000
UGI........................................... 900,000(a) 24,187,500
Viatel........................................ 350,000(a) 2,318,750
---------------
161,016,500
---------------
TOTAL COMMON STOCKS
(cost $1,489,583,932)...................... $ 1,608,988,577
===============
Convertible Preferred Stocks--1.6%
- -------------------------------------------------------------------------------
Energy--.7% NORAM Financing, Cum., 6.25%.................. 200,000 $ 13,450,000
---------------
Finance--.6% Banco Commercial Portugese, Ser. A, 8%........ 57,400 4,183,025
Tanger Factory, Ser. A, Cum., $1.802.......... 299,800 8,094,600
---------------
12,277,625
---------------
Health Services--.1% McKesson, Cum., $2.50......................... 26,100(b) 2,001,544
---------------
Media/Entertainment--.2% Station Casinos, 7%........................... 87,100 3,799,737
---------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $26,183,715)......................... $ 31,528,906
===============
Principal
Convertible Corporate Notes & Bonds--4.0% Amount
- ------------------------------------------------------------------------------- -------------
Energy--.4% ENRON, Exchangeble Notes,
6.25%, 12/13/1998.......................... $ 405,000 $ 8,732,812
---------------
Health Care--.3% Tenet Healthcare, Sub. Deb.,
6%, 12/1/2005.............................. 5,000,000 4,993,750
---------------
Media/Entertainment--.7% Telecommunications, Sub. Deb.,
4.50%, 2/15/2006........................... 15,500,000 13,058,750
---------------
Technology--2.6% First Financial Management, Sr. Deb.,
5%, 12/15/1999............................. 30,000,000 39,562,500
Micron Technology, Sub. Notes,
7%, 7/1/2004............................... 11,000,000 10,133,750
---------------
49,696,250
---------------
Transportation--.0% Campagnie Nationale Air France, Sub. Deb.,
4%, 1/1/2000............................... 893,193(e) 154,663
---------------
TOTAL CONVERTIBLE CORPORATE NOTES AND BONDS
(cost $69,787,173)......................... $ 76,636,225
===============
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1997
<TABLE>
<CAPTION>
Principal
Short-Term Investments--9.4% Amount Value
- ------------------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
U.S. Treasury Bills: 5.20%, 11/13/1997............................. $ 640,000 $ 638,944
5.20%, 12/11/1997............................. 7,343,000 7,303,201
4.91%, 12/18/1997............................. 6,337,000 6,296,443
4.90%, 12/26/1997............................. 1,186,000 1,176,939
5.14%, 1/2/1998............................... 38,223,000 37,893,518
5.293%, 1/8/1998.............................. 85,166,000(c) 84,350,961
4.98%, 1/15/1998.............................. 33,009,000 32,660,425
4.96%, 1/22/1998.............................. 8,705,000(d) 8,602,368
---------------
TOTAL SHORT-TERM INVESTMENTS
(cost $178,963,632)........................ $ 178,922,799
===============
TOTAL INVESTMENTS (cost $1,764,518,452)........................................ 99.1% $ 1,896,076,507
====== ===============
CASH AND RECEIVABLES (NET)..................................................... .9% $ 16,331,975
====== ===============
NET ASSETS..................................................................... 100.0% $ 1,912,408,482
====== ===============
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At October 31, 1997, this security
amounted to $2,001,544 or approximately .1% of net assets.
(c) Partially held by custodian in a segregated account as collateral for open
financial futures postitions.
(d) Partially held by brokers as collateral for open short sale postions.
(e) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate value of $154,663 represent approximately
.01% of net assets:
</TABLE>
<TABLE>
<CAPTION>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
----- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
Campagnie Nationale Air France, Sub. Deb.,
4%, 1/1/2000.................................. 5/4/1993 $0.19 0.01% cost
Industrial Flexible Material..................... 3/31/1993 $5.00 0.00% zero
<FN>
- -----------------------------
* The valuation of these securities has been determined in good faith under the
direction of the Board of Directors.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Financial Futures October 31, 1997
<TABLE>
<CAPTION>
Market Value Unrealized
Covered (Depreciation)
Financial Futures Contracts by Contracts Expiration at 10/31/97
--------------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Standard & Poor's 500............................ 300 $138,600,000 December '97 ($6,765,580)
============
<CAPTION>
Statement of Securities Sold Short October 31, 1997
Common Stocks Shares Value
-------------- ---------- ------------
<S> <C> <C>
Capstone Pharmaceutical Services
(proceeds $1,444,189).......................... 114,000 $1,211,250
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1997
<TABLE>
<CAPTION>
Cost Value
-------------- --------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement
of Investments................................ $1,764,518,452 $1,896,076,507
Cash............................................. 15,239,221
Receivable for investment securities sold........ 9,857,605
Receivable for futures variation margin--Note 4(a) 3,135,000
Dividends and interest receivable................ 2,276,038
Receivable from brokers for proceeds on securities
sold short..................................... 1,444,189
Receivable for shares of Common Stock subscribed. 98,141
Prepaid expenses................................. 66,998
--------------
1,928,193,699
--------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 1,427,227
Payable for investment securities purchased...... 12,759,835
Securities sold short, at value
(proceeds $1,444,189)--see statement............ 1,211,250
Payable for shares of Common Stock redeemed...... 83,411
Accrued expenses................................. 303,494
--------------
15,785,217
--------------
NET ASSETS..................................................................... $1,912,408,482
==============
REPRESENTED BY: Paid-in capital.................................. $1,480,480,285
Accumulated undistributed investment income--net.. 1,430,723
Accumulated net realized gain (loss) on investments
and foreign currency transactions.............. 305,470,030
Accumulated net unrealized appreciation (depreciation)
on investments, securities sold short and foreign
currency transactions [including ($6,765,580)
net unrealized (depreciation) on financial futures] 125,027,444
--------------
NET ASSETS..................................................................... $1,912,408,482
==============
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized)................ 96,494,344
NET ASSET VALUE, offering and redemption price per share....................... $19.82
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Operations Year Ended October 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $168,514 foreign taxes
withheld at source)...................... $ 29,179,779
Interest................................... 25,120,700
-------------
Total Income............................. $ 54,300,479
EXPENSES: Management fee--Note 3(a)................... 15,103,492
Shareholder servicing costs--Note 3(b)...... 4,759,120
Custodian fees--Note 3(b)................... 256,785
Dividends on securities sold short......... 176,500
Prospectus and shareholders' reports....... 91,072
Directors' fees and expenses--Note 3(c)..... 81,676
Professional fees.......................... 80,916
Registration fees.......................... 50,657
Miscellaneous.............................. 35,021
-------------
Total Expenses........................... 20,635,239
-------------
INVESTMENT INCOME--NET.................................................... 33,665,240
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions (including foreign
currency transactions)................ $285,263,065
Short sale transactions.................. 534,069
Net realized gain (loss) on financial futures 12,430,631
Net realized gain (loss) on forward currency
exchange contracts....................... 3,869,975
-------------
Net Realized Gain (Loss).............. 302,097,740
Net unrealized appreciation (depreciation) on
investments, foreign currency transactions and
securities sold short [including ($6,765,580) net
unrealized (depreciation) on financial futures] (82,003,170)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 220,094,570
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $253,759,810
=============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
----------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 33,665,240 $ 34,268,586
Net realized gain (loss) on investments................................ 302,097,740 256,817,745
Net unrealized appreciation (depreciation) on investments.............. (82,003,170) 42,647,165
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 253,759,810 333,733,496
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................. (36,481,865) (31,664,919)
Net realized gain on investments....................................... (255,311,969) (49,168,158)
--------------- ---------------
Total Dividends..................................................... (291,793,834) (80,833,077)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 3,234,126,408 535,580,601
Dividends reinvested................................................... 278,761,496 77,406,742
Cost of shares redeemed................................................ (3,630,898,456) (560,806,153)
--------------- ---------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... (118,010,552) 52,181,190
--------------- ---------------
Total Increase (Decrease) in Net Assets.......................... (156,044,576) 305,081,609
NET ASSETS:
Beginning of Period.................................................... 2,068,453,058 1,763,371,449
--------------- ---------------
End of Period.......................................................... $ 1,912,408,482 $ 2,068,453,058
=============== ===============
Undistributed investment income--net....................................... $ 1,430,723 $ 4,247,348
--------------- ---------------
Shares Shares
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 164,975,986 26,977,092
Shares issued for dividends reinvested................................. 15,539,230 4,123,044
Shares redeemed........................................................ (184,787,972) (28,518,323)
--------------- ---------------
Net Increase (Decrease) in Shares Outstanding....................... (4,272,756) 2,581,813
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of Common
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>
Year Ended October 31,
------------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $20.53 $17.96 $16.49 $16.86 $13.89
------ ------ ------ ------ ------
Investment Operations:
Investment income--net............................. .34 .35 .44 .34 .38
Net realized and unrealized gain (loss) on investments 1.97 3.05 1.67 (.34) 2.95
------ ------ ------ ------ ------
Total from Investment Operations.................. 2.31 3.40 2.11 -- 3.33
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net.............. (.37) (.32) (.47) (.33) (.36)
Dividends from net realized gain on investments... (2.65) (.51) (.17) (.04) --
------ ------ ------ ------ ------
Total Distributions............................... (3.02) (.83) (.64) (.37) (.36)
------ ------ ------ ------ ------
Net asset value, end of period................... $19.82 $20.53 $17.96 $16.49 $16.86
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.............................. 12.97% 19.41% 13.17% .05% 24.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets. 1.01% 1.02% 1.05% 1.14% 1.24%
Ratio of dividends on securities sold short to
average net assets............................. .01% .01% .01% -- --
Ratio of net investment income to average net assets 1.67% 1.78% 2.55% 2.18% 2.92%
Decrease reflected in above expense ratios
due to undertakings by the Manager............. -- -- -- -- .04%
Portfolio Turnover Rate........................... 129.48% 131.30% 132.46% 97.47% 85.26%
Average commission rate paid*..................... $.0631 $.1073 -- -- --
Net Assets, end of period (000's omitted)......... $1,912,408 $2,068,453 $1,763,371 $1,717,733 $1,165,503
<FN>
- -------------------------
* For fiscal years beginning November 1, 1995, the Fund is required to disclose
its average commission rate paid per share for purchases and sales of investment
securities.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Growth and Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. The Fund's investment objective is to provide investors with
long-term capital growth, current income and growth of income, consistent with
reasonable investment risk. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"). Premier Mutual Fund Services, Inc. is the distributor of the
Fund's shares, which are sold to the public without a sales charge.
The Fund'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 (including options and
financial futures) 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 at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. 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. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) 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.
(d) Affiliated issuers: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act. The
following summarizes affiliated issuers during the period ended October 31,
1997:
<TABLE>
<CAPTION>
Shares
-------------------------------------------------
Beginning End Dividend Market
Name of Issuer of Period Purchases Sales Period Income Value
- ------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mortgage Information*............ 245,959 -- 245,959 -- $ -- $ --
<FN>
- --------------------
* No longer an affiliated issuer at October 31, 1997
</TABLE>
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution 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.
(f) 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--Bank Lines of Credit:
The Fund may borrow up to $10 million for leveraging purposes under a
short-term unsecured line of credit and participates with other Dreyfus-managed
funds in a $100 million unsecured line of credit primarily to be utilized for
temporary or emergency purposes, including the financing of redemptions.
Interest is charged to the Fund at rates which are related to the Federal Funds
rate in effect at the time of borrowings. During the period ended October 31,
1997, the Fund did not borrow under either line of credit.
NOTE 3--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 .75 of 1% of the value of the Fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the Fund'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 Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended
October 31, 1997, the Fund was charged $2,806,731 pursuant to the Shareholder
Services Plan.
The Fund 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 Fund. During the period
ended October 31, 1997, the Fund was charged $1,269,788 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended October 31, 1997, the Fund was
charged $256,785 pursuant to the custody agreement.
(c) Each Director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts during the
period ended October 31, 1997:
<TABLE>
<CAPTION>
Purchases Sales
------------- --------------
<S> <C> <C>
Long transactions....................................................... $2,302,124,355 $2,591,176,678
Short sale transactions................................................. 93,823,687 87,475,698
------------- --------------
Total................................................................ $2,395,948,042 $2,678,652,376
============= ==============
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund is engaged in short-selling which obligates the Fund to replace the
security borrowed by purchasing the security at current market value. The Fund
would incur a loss if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund would realize a gain if the price of the security declines between
those dates. Until the Fund replaces the borrowed security, the Fund will
maintain daily, a segregated account with a broker and custodian, of cash and/or
U.S. Government securities sufficient to cover its short position. Securities
sold short at October 31, 1997, and their related market values and proceeds are
set forth in the Statement of Securities Sold Short.
The Fund enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings. When executing forward currency exchange contracts, the Fund
is obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency exchange
contracts which is typically limited to the unrealized gain on each open
contract. At October 31, 1997, there were no open forward currency exchange
contracts.
The Fund may invest in financial futures contracts in order to gain exposure
to or protect against changes in the market. The Fund is exposed to market risk
as a result of changes in the value of the underlying financial instruments (See
Statement of Financial Futures). Investments in financial futures require the
Fund to "mark to market" on a daily basis, which reflects the change in the
market value of the contract at the close of each day's trading. Accordingly,
variation margin payments are received or made to reflect daily unrealized gains
or losses. When the contracts are closed, the Fund recognizes a realized gain or
loss. These investments require initial margin deposits with a custodian, which
consist of cash or cash equivalents, up to approximately 10% of the contract
amount. The amount of these deposits is determined by the exchange or Board of
Trade on which the contract is traded and is subject to change. Contracts open
at October 31, 1997, and their related unrealized depreciation are set forth in
the Statement of Financial Futures.
(b) At October 31, 1997, accumulated net unrealized appreciation on
investments, financial futures and securities sold short was $125,025,414,
consisting of $192,114,449 gross unrealized appreciation and $67,089,035 gross
unrealized depreciation.
At October 31, 1997, 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>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Growth and Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Growth and Income Fund, Inc., including the statements of investments,
financial futures and securities sold short, as of October 31, 1997, 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 Fund'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 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 and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of October 31, 1997 and
confirmation of securities not held by the custodian by correspondence with
others. 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 Growth and Income Fund, Inc. at October 31, 1997, 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 generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
December 8, 1997
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Important Tax Information (Unaudited)
For Federal tax purposes the Fund hereby designates $1.196 per share as a
long-term capital gain distribution of the $2.765 per share paid on December 17,
1996.
The Fund also designates 15.01% of the ordinary dividends paid during the
fiscal year ended October 31, 1997 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1998 of
the percentage applicable to the preparation of their 1997 income tax return. *
<PAGE>
Dreyfus Growth and Income Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 010AR9710
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GROWTH AND INCOME FUND, INC. AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD
DREYFUS & POOR'S 500
PERIOD GROWTH AND COMPOSITE STOCK
INCOME FUND PRICE INDEX *
12/31/91 10,000 10,000
10/31/92 11,257 10,281
10/31/93 13,986 11,814
10/31/94 13,993 12,270
10/31/95 15,836 15,510
10/31/96 18,910 19,245
10/31/97 21,362 25,423
*Source: Lipper Analytical Services, Inc.
