DREYFUS AGGRESSIVE GROWTH FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this annual report for Dreyfus
Aggressive Growth Fund for the year ended August 31, 1997.
Economic Review
The economy has maintained a strong growth trend since last fall,
gradually eroding expectations for a natural slowdown "just around the
corner." Inflation has held steady, even in the face of a substantially
tighter labor market. Corporate profits have continued to surprise on the up
side. Market interest rates have held within a now long-established trading
range. In this setting, monetary policy has remained benign: the Federal
budget is close to being in balance and the Federal Reserve Board (the "Fed")
has kept policy rates unchanged since March.
Real Gross Domestic Product (GDP) grew at above a 4% rate in the nine
months from the third quarter of 1996 to midyear. Indeed, the initial
estimate of near 2% growth in this year's second quarter was raised to 3.6%,
erasing the record of even a temporarily slow period. Virtually all major
economic sectors have contributed to the economy's growth. In turn, the
economy has provided personal income that, in the prevailing low inflation
environment, has translated into strong real purchasing power. The strength
in demand has begun to raise imports, bolstering foreign economies.
Inventories have also started to accumulate at a faster pace, although
inventory levels are currently still quite lean in relation to sales.
The labor market has tightened substantially in recent months as the pace
of new hiring has consistently exceeded the increase in the labor force.
Despite this, wage growth has been moderate while overall compensation growth
has accelerated only modestly. In their determination to hold the line on
prices, companies have resorted to unconventional hiring methods that, so
far, have avoided the need for higher wage offers.
Consensus expectations for corporate profits have been ratcheted upwards
virtually every month for the last several months. So far, positive surprises
in reported profits have justified the market's higher estimates. However,
the strength of the dollar overseas and other factors could affect future
profits.
Market interest rates have been stable since early 1996, oscillating
within a fairly narrow range. Several factors have kept rates steady: the
absence of faster inflation, positive Federal budget developments and an
accommodating Federal Reserve. Although the Fed has not changed policy rates
since March, they have held a bias towards tightening since last summer.
Therefore a move to tighten interest rates should not come as a surprise.
Market Overview
The securities markets generally rose during the last year, though they
experienced several corrections along the way, including a small correction
in late 1996, a sharper broad-based drop in March-May and a decline primarily
in large capitalization shares in August. While earnings growth was solid
throughout the year, shifts in expectations for economic growth and interest
rates had the most impact on market moves.
When economic growth expectations began to favor much stronger growth and
the Federal Reserve Board raised short-term interest rates in early 1997,
fears of much higher interest rates caused a sharp stock market correction
similar to the decline in mid-1996 when interest rates also rose for a couple
of months. When commodity prices declined and interest rates again declined,
stocks rallied again, supported by solid first-quarter earnings results. The
equity market rally continued into the summer as second-quarter results were
also generally above expectations. Only in August, when a few major companies
like Coca-Cola and Gillette indicated some disappointing fundamental growth
prospects, did the year-long leadership of large capitalization stocks seem
to pause.
The extreme outperformance of larger capitalization shares during the
August fiscal year, following the sharp market correction in 1996 and
fostered by investors' fears of smaller capitalization illiquidity, pushed
large cap valuations to a very high multiple valuation of growth rates,
making them very vulnerable to any earnings disappointments. More positive
recent performance by smaller capitalization aggressive growth stocks with
strong, far above-average earnings growth prospects for 1997 and 1998
reinforced confidence in our long-term investment philosophy that
focuses on earnings growth prospects over the next 12 to 18 months.
Portfolio Focus
As you know, the Fund's investment objective is capital appreciation. It
seeks to achieve its objective through a growth-oriented approach to
investing in stocks based on the philosophy that, over time, relative stock
performance is driven by relative earnings performance. The Fund primarily
looks for companies which will experience earnings growth at an above-average
rate for the upcoming 12 to 18 months. The Fund's investments generally are
made without regard to a company's market capitalization. The Fund may and
will, from time to time, seek to invest in small, medium and large
capitalized companies with such growth potential. While there are no
company-size guideline targets for the portfolio, a focus on the
fastest-growing industry sectors and specific companies under present market
conditions has led the investment approach to emphasize smaller
capitalization stocks, including small cap companies of under $200 million
market capitalization. The Fund's investment orientation has tended to
generate a significant portfolio weighting in the high growth areas
such as health care, electronic technology, consumer products and
services. Attractive aggressive growth companies in these sectors are
often described as innovative organizations on the cutting edge of new
product development or new focused business approaches. These companies
are often highly dependent on new business innovations that are critical
to the companies' future growth prospects. Shares of such companies are often
volatile, compared with the general market, and may react sharply to key news
announcements about the new product and business developments which influence
growth expectations and the multiple of earnings at which such shares trade.
For the fiscal year ended August 31, 1997, Dreyfus Aggressive Growth Fund
had a total return of -11.63%.* This compares with a total return of 40.62%
for the Fund's benchmark, the Standard & Poor's 500 Composite Stock Price
Index.**
In some measure, the Fund's underperformance for the year was due to
downside earnings surprises caused by delayed new product or new service
introductions that caused negative revenue and earnings results. Even in a
bullish market environment, companies, regardless of capitalization size, can
be affected by such factors. Additionally, the fear of rising interest rates
weighed negatively on Fund performance in early 1997, as investor tolerance
for higher volatility stocks remained low even though fundamental company
growth remained strong for most Fund holdings.
The sharpest period of underperformance, during February-April, occurred
during the overall market correction and was exaggerated by both investor
liquidation of smaller company shares in favor of larger companies and by
disappointment in smaller companies where expected positive news had not yet
occurred to spur positive investor interest. During the May-June market
rally, large and small capitalization shares broadly rebounded on a more even
basis. By August, the negative surprises hurt performance of some larger
companies, while more positive news for smaller stocks led to a performance
reversal strongly favoring successful, aggressive growth shares in the Fund.
Some of the stocks that contributed to the Fund's more recent positive
performance included Crystal Systems Solutions (software), Complete
Management (physician practice management), Chromatics Color Science
International
(medical technology), Ultralife Batteries (technology), Famous Dave's of
America (restaurants), Eco Soil Systems (agricultural chemicals), and
Microvision (defense technology).
Significant positions that negatively impacted performance during the
fiscal year included ONCOR (biotechnology), Commodore Applied Technologies
(pollution technology), Four Media (entertainment), Larson Davis (industrial
technology), AMNEX (telephone utilities), Fuisz Technologies (health care),
Ultrafem (consumer products) and Alma International (consumer marketing).
The six largest portfolio holdings, representing over 28% of the Fund's
assets, reflect the aggressive growth emphasis on medical testing technology
(Chromatics Color Science International), genetic health care analysis
(ONCOR), semiconductor packaging technology (Sheldahl), physician practice
management (Complete Management) and electronic software technology (Crystal
Systems Solutions, Level 8 Systems). These are companies with significant
growth opportunities via new product introductions and acquisitions that we
believe will generate far above-average revenue and earnings growth over the
next 12 to 18 months.
A statement of investments and other financial information are included
for your review. We appreciate your investment in the Fund and look forward
to continuing to serve your investment needs.
Sincerely,
[Michael Schonberg signature logo]
Michael Schonberg
Portfolio Manager
September 16, 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. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS AGGRESSIVE GROWTH FUND AUGUST 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS AGGRESSIVE
GROWTH FUND
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
Dollars
$16,056
Dreyfus Aggressive
Growth Fund
$16,019
Standard & Poor's 500
Composite Stock
Price Index*
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
Average Annual Total Returns
One Year Ended From Inception (9/29/95)
August 31, 1997 to August 31, 1997
---------------------- -------------------------
<S> <C>
(11.63%) 27.97%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Aggressive
Growth Fund on 9/29/95 (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. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market
performance which 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>
<CAPTION>
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS AUGUST 31,1997
Common Stocks-97.6% Shares Value
------- -------
<S> <C> <C> <C>
Commercial Services-6.1% ENSEC International 150,000 (a) $ 159,375
Four Media............................. 320,000 (a) 2,560,000
MER Telemanagement Solutions........... 125,000 (a) 968,750
Quintel Entertainment.................. 144,900 (a) 2,119,163
Wiztec Solutions....................... 210,000 (a) 2,178,750
-------
7,986,038
-------
Consumer Durables-.2% Black Rock Golf........................ 147,000 (a) 202,125
-------
Consumer Non-durables-5.3% American Craft Brewery International 95,000 (a) 142,500
Famous Dave's of America............... 218,000 (a) 3,406,250
Ultrafem............................... 390,000 (a) 3,412,500
-------
6,961,250
-------
Consumer Services-1.4% Alma International.................... 1,300,000 (a) 406,250
Home Security.......................... 135,000 (a) 1,451,250
-------
1,857,500
-------
Electronic Technology-15.4% Advanced Photonix, Cl. A 520,000 (a) 1,040,000
FieldWorks............................. 170,000 (a) 1,062,500
Image Processing Systems............... 423,700 (a) 705,403
Imaging Technologies................... 600,000 (a) 4,050,000
Larson Davis........................... 255,000 (a) 1,976,250
Nexar Technologies..................... 120,000 (a) 540,000
Sheldahl............................... 285,000 (a) 6,697,500
TSL Holdings........................... 10 (a) ----
Ultralife Batteries.................... 222,500 (a) 4,255,312
-------
20,326,965
-------
Energy Minerals-2.1% TransMontaigne Oil.................. 160,000 (a) 2,780,000
-------
Finance-1.3% Preferred Employers Holdings........ 214,600 (a) 1,663,150
-------
Health Services-15.1% Atlantic Pharmaceuticals 140,000 (a,b) 833,000
CORE........................................ 150,000 (a) 1,387,500
Complete Management.................... 402,000 (a) 6,607,875
Comprehensive Care..................... 150,000 (a) 1,734,375
HemaCare............................... 350,000 (a) 459,375
OMEGA Health Systems................... 310,000 (a) 2,557,500
OncorMed............................... 475,000 (a) 3,503,125
OnGard Systems......................... 320,000 (a) 525,000
Pace Health Management Systems......... 210,000 (a) 367,500
Patient InfoSYSTEMS.................... 330,000 (a) 1,113,750
Substance Abuse Technologies........... 1,400,000 (a) 787,500
-------
19,876,500
-------
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,1997
Common Stocks (continued) Shares Value
------- -------
Health Technology-13.8% Alpha 1 Biomedicals.................. 22,646 (a) $ 2,491
Avigen..................................... 200,000 (a) 500,000
Cytoclonal Pharmaceutics (Warrants).... 200,000 (a) 250,000
Fuisz Technologies..................... 85,000 (a) 956,250
MacroChem.............................. 580,000 (a) 3,008,750
Microvision............................ 140,000 (a) 1,618,750
Microvision (Warrants)................. 140,000 (a) 700,000
Neopharm............................... 90,000 (a) 371,250
ONCOR.................................. 1,525,000 (a) 6,385,938
Pacific Pharmaceuticals................ 300,000 (a) 581,250
Transcend Therapeutics................. 100,000 (a) 837,500
VIMRx Pharmaceuticals.................. 1,000,000 (a) 3,000,000
-------
18,212,179
-------
Industrial Services-3.4% Commodore Applied Technologies 725,000 (a) 3,398,437
Commodore Applied Technologies (Warrants) 350,000 (a) 371,875
Commodore Environmental Services....... 805,000 (a) 553,438
ERD Waste.............................. 240,000 (a) 172,500
-------
4,496,250
-------
Process Industries-12.5% Chromatics Color Science................ 605,000 (a) 7,108,750
Conserver Corporation of America....... 282,900 (a) 2,227,838
Eco Soil Systems....................... 415,000 (a) 2,982,812
Ocal........................................ 130,000 (a) 365,625
STELAX Industries...................... 602,500 (a) 789,275
TST/Impreso............................ 220,000 (a) 2,915,000
-------
16,389,300
-------
Technology Services-18.8% Crystal Systems Solutions................... 200,000 (a) 6,150,000
EA Industries.......................... 420,000 (a) 3,412,500
Image Guided Technologies.............. 150,000 (a) 787,500
Level 8 Systems........................ 305,000 (a) 4,841,875
McAfee Associates...................... 65,000 (a) 3,680,625
Smallworldwide, ADS.................... 65,000 (a) 1,088,750
Tidel Technologies..................... 350,000 (a) 1,028,125
TriTeal..................................... 475,000 (a) 3,740,625
-------
24,730,000
-------
Utilities-2.2% AMNEX......................... 442,500 (a) 1,189,219
Intellicell............................ 199,500 (a) 1,770,562
-------
2,959,781
-------
TOTAL COMMON STOCKS
(cost $136,259,497).................. $128,441,038
=======
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,1997
Principal
Short-Term Investments-2.6% Amount Value
------- -------
U.S. Treasury Bills: 5.05%, 9/18/97.......... $ 2,484,000 $ 2,476,945
5.05%, 10/16/97........................ 989,000 982,483
-------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,460,827).................... $ 3,459,428
=======
TOTAL INVESTMENTS (cost $139,720,324)....................................... 100.2% $131,900,466
==== =======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.2%) $ (296,893)
==== =======
NET ASSETS.................................................................. 100.0% $131,603,573
==== =======
Notes to Statement of Investments:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted
security, with an aggregate market value of $833,000, represents
approximately .6% of net assets;
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
- ------ ------------ ----------- -------------- --------------
Atlantic Pharmaceuticals................. 8/16/96 $6.12 .6% 85% of
market value
*The valuation of this security had been determined in good faith under
the direction of the Board of Directors.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1997
Cost Value
-------- --------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $139,720,324 $131,900,466
Cash....................................... 624,539
Receivable for investment securities sold.. 630,966
Receivable for shares of Common Stock subscribed 420,167
Prepaid expenses........................... 69,203
--------
133,645,341
--------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 93,855
Due to Distributor......................... 27,994
Payable for investment securities purchased 1,581,660
Payable for shares of Common Stock redeemed 240,098
Accrued expenses........................... 98,161
--------
2,041,768
--------
NET ASSETS.................................................................. $131,603,573
========
REPRESENTED BY: Paid-in capital............................ $150,759,716
Accumulated investment (loss).............. (1,839,502)
Accumulated net realized gain (loss) on investments (9,496,783)
Accumulated net unrealized appreciation (depreciation)
....................... on investments-Note 4 (7,819,858)
--------
NET ASSETS.................................................................. $131,603,573
========
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized)............. 6,558,571
NET ASSET VALUE, offering and redemption price per share-Note 3(d).......... $20.07
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 1997
INVESTMENT INCOME
INCOME: Interest................................... $ 102,902
Cash dividends............................. 24,280
------
Total Income......................... $ 127,182
EXPENSES: Management fee-Note 3(a)................... 852,091
Shareholder servicing costs-Note 3(b)...... 556,583
Interest expense-Note 2.................... 412,551
Professional fees.......................... 78,300
Prospectus and shareholders' reports....... 67,210
Registration fees.......................... 38,918
Loan commitment fees-Note 2................ 32,110
Directors' fees and expenses-Note 3(c)..... 17,269
Custodian fees-Note 3(b)................... 15,162
Miscellaneous.............................. 3,480
------
Total Expenses....................... 2,073,674
Less-reduction in management fee due to
undertaking-Note 3(a).................. (106,990)
------
Net Expenses......................... 1,966,684
------
INVESTMENT (LOSS)........................................................... (1,839,502)
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $(7,342,197)
Net unrealized appreciation (depreciation) on investments 1,493,689
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (5,848,508)
------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(7,688,010)
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS AGGRESSIVE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
August 31, 1997 August 31, 1996*
--------- ---------
<S> <C> <C>
OPERATIONS:
Investment (loss)......................................................... $ (1,839,502) $ (527,178)
Net realized gain (loss) on investments................................... (7,342,197) (2,154,586)
Net unrealized appreciation (depreciation) on investments................. 1,493,689 (8,053,057)
-------- --------
Net Increase (Decrease) in Net Assets Resulting from Operations......... (7,688,010) (10,734,821)
-------- --------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................. 158,318,662 320,310,618
Net assets received in connection with reorganization-Note 1.............. 44,129,796 ----
Cost of shares redeemed................................................... (182,497,411) (190,235,261)
-------- --------
Increase (Decrease) in Net Assets from Capital Stock Transactions....... 19,951,047 130,075,357
-------- --------
Total Increase (Decrease) in Net Assets............................... 12,263,037 119,340,536
NET ASSETS:
Beginning of Period....................................................... 119,340,536 ----
-------- --------
End of Period............................................................. $ 131,603,573 $ 119,340,536
======== ========
Investment (loss)........................................................... $ (1,839,502) ----
-------- --------
Shares Shares
-------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................... 7,696,328 13,250,405
Shares issued in connection with reorganization-Note 1.................... 2,636,188 ----
Shares redeemed........................................................... (9,030,023) (7,994,327)
-------- --------
Net Increase (Decrease) in Shares Outstanding........................... 1,302,493 5,256,078
======== ========
*From September 29, 1995 (commencement of operations) to August 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS AGGRESSIVE GROWTH FUND
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.
Year Ended August 31,
------------------------------
PER SHARE DATA: 1997 1996(1)
---- ----
<S> <C> <C>
Net asset value, beginning of period.................................... $22.71 $12.50
---- ----
Investment Operations:
Investment (loss)....................................................... (.26) (.10)
Net realized and unrealized gain (loss)
on investments........................................................ (2.38) 10.31(2)
---- ----
Total from Investment Operations........................................ (2.64) 10.21
---- ----
Net asset value, end of period.......................................... $20.07 $22.71
==== ====
TOTAL INVESTMENT RETURN..................................................... (11.63%) 81.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets....................... 1.34% 1.16%(3)
Ratio of interest expense and loan commitment fees
to average net assets................................................. .39% .24%(3)
Ratio of investment (loss)
to average net assets................................................. (1.62%) (1.04%)(3)
Decrease reflected in above expense ratios
due to undertaking by the Manager..................................... .09% .17%(3)
Portfolio Turnover Rate................................................. 76.45% 125.17%(3)
Average commission rate paid (4)........................................ $.0430 $.0543
Net Assets, end of period (000's Omitted)............................... $131,604 $119,341
(1) From September 29, 1995 (commencement of operations) to August 31, 1996.
(2) In addition to the net realized and unrealized loss on investments, this amount includes an increase in net asset value per
share resulting from the timing of issuances and redemptions of Fund shares
in relation to fluctuating market values for the portfolio.
(3) Not annualized.
(4) The Fund is required to disclose its average commission rate paid per share for purchases and sales of investment
securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Aggressive Growth Fund (the "Fund") is a series of Dreyfus Growth
and Value Funds, Inc. (the "Company") which 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 eight
series, including the Fund. The Fund's investment objective is capital
appreciation. 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. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a
sales charge.
On November 6, 1996, the Board of Directors of the Fund approved, subject
to approval by the shareholders of the Dreyfus Special Growth Fund ("DSGF"),
an Agreement and Plan of Reorganization providing for the transfer of all or
substantially all of the DSGF's assets and liabilities to the Fund in a tax
free exchange for shares of Common Stock of the Fund at net asset value and
the assumption of stated liabilities (the "Exchange"). The Exchange was
approved by the shareholders of DSGF on April 7, 1997, and was consummated
after the close of business on April 18, 1997 at which time 2,965,625
Institutional shares valued at $13.60 per share, and 274,371 Retail shares
valued at $13.84 per share, representing combined net assets of $44,129,796,
[including ($1,260,489) net unrealized (depreciation) on investments] were
exchanged by DSGF for the respective number of shares of the Fund.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that fund's operations; expenses which are applicable to all funds
are allocated among them on a pro rata basis.
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.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(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) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain, if any, are normally declared and paid 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, it is the
policy of the Fund not to distribute such gain.
(d) 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.
DREYFUS AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $5,827,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
August 31, 1997. The carryover does not include net realized securities
losses from November 1, 1996 through August 31, 1997 which are treated, for
Federal income tax purposes, as arising in fiscal 1998. If not applied,
$33,000 of the carryover expires in fiscal 2004 and $5,794,000 expires in
fiscal 2005.
NOTE 2-BANK LINE OF CREDIT:
Prior to April 18, 1997, the Fund could borrow up to $40 million for
leveraging purposes under a short-term unsecured line of credit and currently
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 and an additional commitment fee was paid on the line of credit
utilized for leveraging. At August 31, 1997, there were no outstanding
borrowings under either line of credit.
The average daily amount of borrowings outstanding under both
arrangements during the period ended August 31, 1997 was approximately $6.47
million with a related weighted average annualized interest rate of 6.38%.
The maximum amount borrowed at any time during the period ended August 31,
1997 was $26.4 million.
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. The Manager has undertaken
from April 18, 1997 through April 18, 1999 to reduce the management fee paid
by the Fund, to the extent that the Fund's aggregate expenses, exclusive of
taxes, brokerage and extraordinary expenses, exceed an annual rate of 1.20%
of the value of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertaking, amounted to $106,990 during the
period ended August 31, 1997.
(b) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the Fund's average daily net
assets for the provision of certain services. 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.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professionals) in respect of these
services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended August 31, 1997, the Fund was charged an
aggregate of $284,030 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. Such
compensation amounted to $152,210 during the period ended August 31, 1997.
The Fund compensates Mellon under a custody agreement to provide
custodial services for the Fund. During the period ended August 31, 1997,
$15,162 was charged by Mellon pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $5,000 and an attendance fee of
$500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
DREYFUS AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(d) Effective March 3, 1997, a 1% redemption fee is charged on certain
redemptions of Fund shares (including redemption
through use of the Fund Exchanges service) where the shares being redeemed
were issued subsequent to a specified effective date and the redemption or
exchange occurs less than fifteen days following the date of issuance.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended August 31, 1997,
amounted to $91,153,153 and $138,847,952, respectively.
At August 31, 1997, accumulated net unrealized depreciation on
investments was $7,819,858, consisting of $22,427,832 gross unrealized
appreciation and $30,247,690 gross unrealized depreciation.
At August 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).
DREYFUS AGGRESSIVE GROWTH FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Aggressive Growth Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Aggressive Growth Fund
(one of the Series constituting Dreyfus Growth and Value Funds, Inc.) as of
August 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 as of August 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 Aggressive Growth Fund at August 31, 1997, and 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 signature logo]
New York, New York
October 7, 1997
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS AGGRESSIVE GROWTH FUND
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. 256AR978
Registration Mark
[Dreyfus logo]
Aggressive Growth
Fund
Annual Report
August 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS AGGRESSIVE GROWTH FUND AND THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD DREYFUS
& POOR'S 500 AGGRESSIVE
PERIOD COMPOSITE STOCK GROWTH
PRICE INDEX* FUND
9/29/95 10,000 10,000
11/30/95 10,401 11,504
2/29/96 11,064 16,744
5/31/96 11,627 21,896
8/31/96 11,391 18,168
11/30/96 13,298 15,216
2/28/97 13,957 15,656
5/31/97 15,050 14,608
8/31/97 16,019 16,056
*Source: Lipper Analytical Services, Inc.
