<PAGE>
Dreyfus
Large Company
Value Fund
Annual Report
October 31, 1997
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this annual report of the Dreyfus Large
Company Value Fund, a Dreyfus Growth & Value Fund, for the fiscal year ended
October 31, 1997. Over this period, your Fund produced a total return of 25.29%*
which compares with a total return of 32.10% for the Standard and Poor's 500
Composite Stock Price Index (the "S&P 500")** and 29.70% for the Standard and
Poor's Barra Value Index.***
While the performance results of the Fund during the measurement period
trailed those of the S&P 500 Index and the S&P Barra Value Index, we believe
that the valuation of these major market benchmarks was excessive during this
period. We therefore sought to construct an investment portfolio with a
relatively low correlation to these indices. In doing so, we believed that the
risk level of the Fund was significantly lower than that of these benchmarks.
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 (the "GDP") 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. Measured by price changes alone,
excluding income, the Dow Jones Industrial Average gained 23.58% for the 12
months, the S&P 500, 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 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
<PAGE>
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.
Richard Hoey, Chief Economist for The Dreyfus Corporation, reviewing recent
events, said that the U.S. stock market had a selling panic, followed by a
buying panic. The underlying logic of it all was valuation, he observed.
When the Dow Jones index peaked at above 8200 in early August, the
stock market was simply discounting favorable U.S. fundamentals into
high stock prices, said Hoey. The financial crisis in Asia was the
trigger for a correction of the major problem for the U.S. stock market:
high valuation.
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 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 influx of investors into stocks when prices dipped was a good augury
for the future. 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 market averages.
VALUE INVESTING
We believe value stocks can be an important part of an investment portfolio
for a number of reasons.
First, stocks with low valuations theoretically have, by definition, more
upside potential than downside risk. Buying value stocks is akin to buying
clothes at wholesale prices or on sale instead of paying full retail. While
growth of sales and earnings are important--and we do believe in buying growing
companies--the price paid for this growth is critical as well. We want to buy
this growth at bargain prices.
Second, many analysts have low expectations for the earnings growth rate of
value stocks, resulting in the low valuations assigned to these securities. Low
growth expectations tend to be easier for management to meet or even exceed than
high expectations.
Third, value investors tend to work more with actual data and with near-term
projections when analyzing companies. Obviously, this type of data is more
accurate than long-term forecasts. There are too many variables which can impact
the long term.
Fourth, value stocks possess a number of favorable characteristics: higher
dividends, more stock repurchases, more takeovers, and more restructurings.
Dividends are cash, usually paid out quarterly to common stock shareholders.
Dividends may be the only actual tangible return to the common stock shareholder
from the company. To realize more value than the dividend, the stock must be
sold to another investor. Theoretically, if shareholders could not sell a stock
(which of course they can), investors would only buy stocks that paid a cash
dividend. Next, companies selling at low valuations usually have the option to
repurchase their own stock with any available cash and add to earnings in the
process. When management repurchases a company's stock, it provides demand for
that stock, forcing the price higher, everything else being equal. Regarding
takeovers, these tend to happen to inexpensively priced companies, in whatever
way a potential buyer might define this value. Finally, restructurings tend to
occur with value stocks because these companies often tend to have a problem
which needs to be fixed. It is the opportunity to fix a problem and in the
process of fixing this problem (usually through some sort of restructuring of
the company) that value is realized.
Value stocks are often ignored by Wall Street analysts. It is much easier for
analysts to promote a glamour stock with a simple story, even if that story is
already universally known and recognized in the stock price. This lack of
attention and focus by Wall Street provides a decided advantage for relatively
undiscovered or underfollowed value stocks.
<PAGE>
Real money in the stock market is not made by following the herd of other
investors, copying what they have already done and where money has already
been made. Real money is made leading this herd. As the herd follows,
demand for the security is increased, resulting in higher prices.
PORTFOLIO STRATEGY
In order to identify value, we generally select securities for the Fund based
on a three-pronged approach. First, a computer screening model is used to
identify companies with a forward earnings yield (next 12 months' earnings
divided by the current market price) that is greater than the current yield of
the five-year U.S. Treasury bond. Second, another computer model seeks to
identify those companies that offer the best exposure to the current market and
economic environment. Third, we review potential investments with our team of
Dreyfus security analysts to identify a catalyst that could realize the value
inherent in the security and increase the price of the stock.
In terms of constructing a portfolio of stocks, the Fund generally avoids
significantly overweighting or underweighting any given economic sector relative
to the exposure of the S&P 500 Index to that sector. This strategy focuses the
Fund on selecting the potentially best securities within each given sector of
the economy. The Fund attempts to avoid trying to decide which sector will be
favored over the near term by the stock market since we believe this preference
is too often random.
The Fund typically sells a stock when its earnings yield falls below the
90-day U.S. Treasury yield, when a stock appears to be poorly exposed to the
current market or economic environment, when the portfolio manager, working with
our analysts, believes it represents a potentially deteriorating investment
based on our fundamental research, or when the stock market emphatically
indicates that our investment thesis is incorrect.
PORTFOLIO REVIEW
Investment results during this annual period benefited from holdings such as
Intel, Storage Technology, Pennzoil, Bankers Trust New York, Equitable, Watson
Pharmaceuticals, Cooper Cameron, Xerox, Dayton Hudson, and Meyer (Fred). These
securities had been undervalued by the marketplace for a variety of reasons, and
began to either correct investor misperceptions or solve fundamental problems
during the annual period, resulting in significant price appreciation. Relative
performance results were penalized by holdings including First Brands, Fruit of
the Loom CI.S, La Quinta Inns, 3COM, Applied Materials, Micron Technology,
Aetna, Biogen, Millennium Chemicals, and Caterpillar. While we believed these
securities to be undervalued by the marketplace at purchase, for various reasons
these values either remained unrealized at the end of the annual period, or we
redirected the assets into new ideas with greater perceived potential.
Thank you for entrusting Dreyfus with the management of your investments.
Sincerely,
Timothy M. Ghriskey
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. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
***The Standard & Poor's Barra Value Index is a capitalization-weighted index
of all the stocks in the Standard & Poor's 500 Composite Stock Price Index
that have low price-to-book ratios. It is designed so that approximately
50% of the S&P 500's market capitalization is in the Value Index.
<PAGE>
Dreyfus Large Company Value Fund October 31, 1997
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS LARGE COMPANY
VALUE FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
$21,466
Standard & Poor's 500
Composite Stock
Price Index*
$21,385
Dreyfus Large Company
Value Fund
Dollars
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- -------------------------------------------------------------------------------
One Year Ended From Inception (12/29/93)
October 31, 1997 to October 31, 1997
---------------- -------------------------
25.29% 21.89%
- -----------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Large Company
Value Fund on 12/29/93 (Inception Date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. For comparative
purposes, the value of the Index on 12/31/93 is used as the beginning value on
12/29/93. 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.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Statement of Investments October 31, 1997
<TABLE>
<CAPTION>
Common Stocks--93.7% Shares Value
- ------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Consumer Durables--3.2% General Motors................................ 37,200 $ 2,387,775
Whirlpool..................................... 44,800 2,716,000
--------------
5,103,775
--------------
Consumer Non-Durables--9.6% Cadbury Schweppes, A.D.R...................... 295,000 2,962,095
Dean Foods.................................... 55,000 2,602,188
Kimberly-Clark................................ 57,400 2,981,213
Philip Morris................................. 60,600 2,401,275
RJR Nabisco Holdings.......................... 75,700 2,398,744
Warnaco Group, Cl. A.......................... 79,000 2,231,750
--------------
15,577,265
--------------
Consumer Services--4.7% Circus Circus Enterprises..................(a) 116,400 2,589,900
Harte-Hanks Communications.................... 64,400 2,237,900
La Quinta Inns................................ 154,700 2,765,263
--------------
7,593,063
--------------
Electronic Technology--14.3% 3COM .....................................(a) 52,600 2,179,613
Adaptec....................................(a) 56,200 2,722,188
Applied Materials..........................(a) 50,800 1,695,450
Boeing........................................ 49,560 2,372,685
Cabletron Systems..........................(a) 77,000 2,233,000
International Business Machines............... 25,900 2,539,819
Lockheed Martin............................... 22,500 2,138,907
Micron Electronics.........................(a) 145,000 2,011,875
Micron Technology..........................(a) 73,000 1,957,313
Storage Technology.........................(a) 55,600 3,263,025
--------------
23,113,875
--------------
Energy Minerals--6.2% Mobil......................................... 29,500 2,147,969
Phillips Petroleum............................ 52,900 2,559,037
Tosco ........................................ 77,700 2,564,100
USX-Marathon Group............................ 76,000 2,717,000
---------------
9,988,106
---------------
Finance--16.8% Allstate...................................... 30,300 2,513,006
BankAmerica................................... 36,200 2,588,300
Bankers Trust New York........................ 21,200 2,501,600
Chase Manhattan............................... 20,500 2,365,187
Equitable..................................... 64,700 2,664,831
First Union................................... 53,300 2,615,031
Fleet Financial Group......................... 33,800 2,173,762
Grupo Financiero Banamex Accival, Cl.B.....(a) 952,900 1,881,991
Instituto Bancario San Paolo di Torino........ 360,000 2,708,399
NationsBank................................... 43,000 2,574,625
Travelers Group............................... 38,800 2,716,000
--------------
27,302,732
--------------
</TABLE>
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1997
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- -------------- ------------
<S> <C> <C>
Health Services--4.7% Allegiance.................................... 76,580 $ 2,125,095
Manor Care.................................... 85,700 2,940,581
PacifiCare Health Systems, Ser. B..........(a) 40,500 2,622,375
------------
7,688,051
------------
Health Technology--4.8% Allergan...................................... 82,000 2,700,875
Biogen.....................................(a) 81,800 2,740,300
Genzyme....................................(a) 88,900 2,433,637
------------
7,874,812
------------
Industrial Services--1.9% Cooper Cameron.............................(a) 42,000 3,034,500
------------
Non-Energy Minerals--2.0% Georgia-Pacific............................... 21,200 1,798,025
ISPAT International, N.V...................(a) 54,700 1,384,594
------------
3,182,619
------------
Process Industries--4.6% Owens-Illinois.............................(a) 71,300 2,459,850
Premark International......................... 87,000 2,354,437
Temple-Inland................................. 45,500 2,610,563
------------
7,424,850
------------
Producer Manufacturing--7.2% Caterpillar................................... 48,000 2,460,000
Ingersoll-Rand................................ 63,700 2,480,319
Philips Electronics, N.V...................... 27,000 2,116,125
Raychem....................................... 21,400 1,938,038
Xerox ........................................ 33,900 2,688,694
------------
11,683,176
------------
Retail Trade--4.8% Dayton Hudson................................. 38,500 2,418,281
Federated Department Stores................(a) 56,600 2,490,400
Meyer (Fred)...............................(a) 101,600 2,901,950
------------
7,810,631
------------
Transportation--1.6% CSX........................................... 47,200 2,581,250
------------
Utilities--7.3% China Light & Power........................... 556,000 2,927,451
Coastal....................................... 43,500 2,615,437
Empresa Nacional Electricidad, A.D.R.......... 113,600 2,286,200
Telecomunicacoes Brasileiras S.A., A.D.R...... 19,400 1,969,100
Companhia de Saneamento Basico do
Estado de San Paulo........................ 10,700 1,979,684
------------
11,777,872
------------
TOTAL COMMON STOCKS
(cost $143,571,323)........................ $151,736,577
------------
------------
</TABLE>
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1997
<TABLE>
<CAPTION>
Preferred Stocks--1.1% Shares Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Energy Minerals; Petroleo Brasileiro S.A.
(cost $2,152,100).......................... 9,600,000 $ 1,784,872
------------
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Short-Term Investments--5.2% Amount
- ------------------------------------------------------------------------------- -------------
<S> <C> <C>
U.S. Treasury Bills: 4.93%, 1/2/1998............................... $ 308,000 $ 305,345
4.97%, 1/8/1998............................... 2,556,000 2,531,539
4.91%, 1/15/1998.............................. 2,317,000 2,292,533
5.11%, 1/22/1998.............................. 3,307,000 3,268,010
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $8,399,234).......................... $ 8,397,427
------------
------------
TOTAL INVESTMENTS (cost $154,122,657).......................................... 100.0% $161,918,876
------- ------------
------- ------------
CASH AND RECEIVABLES (NET)..................................................... .0% $ 40,898
------- ------------
------- ------------
NET ASSETS..................................................................... 100.0% $161,959,774
------- ------------
------- ------------
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Non-income producing.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1997
<TABLE>
<CAPTION>
Cost Value
------------- ------------
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $154,122,657 $161,918,876
Cash............................................. 130,788
Receivable for shares of Common Stock subscribed. 208,709
Dividends and interest receivable................ 117,965
Prepaid expenses................................. 52,783
------------
162,429,121
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 109,514
Due to Distributor............................... 35,475
Payable for shares of Common Stock redeemed...... 257,340
Accrued expenses................................. 67,018
------------
469,347
------------
NET ASSETS..................................................................... $161,959,774
------------
------------
REPRESENTED BY: Paid-in capital.................................. $145,889,241
Accumulated undistributed investment income--net.. 291,381
Accumulated net realized gain (loss) on investments,
forward currency exchange contracts and
foreign currency transactions.................. 7,982,789
Accumulated net unrealized appreciation (depreciation) on
investments and foreign currency transactions.. 7,796,363
------------
NET ASSETS..................................................................... $161,959,774
------------
------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized)................ 7,584,349
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............. $21.35
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
Statement of Operations Year Ended October 31, 1997
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $24,274 foreign taxes
withheld at source)...................... $ 1,406,989
Interest................................... 214,703
-----------
Total Income............................. $ 1,621,692
EXPENSES: Management fee--Note 3(a).................. 745,927
Shareholder servicing costs--Note 3(b)..... 353,146
Registration fees.......................... 72,622
Custodian fees--Note 3(b).................. 32,356
Professional fees.......................... 26,078
Prospectus and shareholders' reports....... 20,523
Directors' fees and expenses--Note 3(c).... 10,159
Miscellaneous.............................. 7,603
-----------
Total Expenses........................... 1,268,414
Less--reduction in management fee due to
undertaking--Note 3(a)................... (54,892)
-----------
Net Expenses............................. 1,213,522
-----------
INVESTMENT INCOME--NET................................................... 408,170
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions............ $ 7,964,889
Net realized gain (loss) on forward currency
exhange contracts
Short transactions.................... 18,706
-----------
Net Realized Gain (Loss)................. 7,983,595
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions 5,923,746
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 13,907,341
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $14,315,511
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
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...................................................... $ 408,170 $ 167,322
Net realized gain (loss) on investments..................................... 7,983,595 2,354,531
Net unrealized appreciation (depreciation) on investments................... 5,923,746 1,553,523
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations........... 14,315,511 4,075,376
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net...................................................... (262,874) (91,396)
Net realized gain on investments............................................ (2,353,920) (870,438)
------------ ------------
Total Dividends........................................................... (2,616,794) (961,834)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................... 172,616,707 34,849,269
Dividends reinvested........................................................ 2,254,119 961,690
Cost of shares redeemed..................................................... (58,796,553) (11,424,820)
------------ ------------
Increase (Decrease) in Net Assets from Capital Stock Transactions......... 116,074,273 24,386,139
------------ ------------
Total Increase (Decrease) in Net Assets................................. 127,772,990 27,499,681
NET ASSETS:
Beginning of Period......................................................... 34,186,784 6,687,103
------------ ------------
End of Period............................................................... $161,959,774 $ 34,186,784
------------ ------------
------------ ------------
Undistributed investment income--net.......................................... $ 291,381 $ 146,085
------------ ------------
Shares Shares
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................. 8,530,858 2,046,872
Shares issued for dividends reinvested...................................... 121,976 65,600
Shares redeemed............................................................. (2,962,260) (651,191)
------------ ------------
Net Increase (Decrease) in Shares Outstanding............................. 5,690,574 1,461,281
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Large Company Value 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 financial statements.
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994(1)
------ ------ ------ --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period....................... $18.05 $15.46 $12.63 $12.50
------ ------ ------ ------
Investment Operations:
Investment income--net..................................... .07 .12 .22 .26
Net realized and unrealized gain (loss) on investments..... 4.33 4.68 2.93 (.13)
------ ------ ------ ------
Total from Investment Operations........................... 4.40 4.80 3.15 .13
------ ------ ------ ------
Distributions:
Dividends from investment income--net...................... (.11) (.21) (.32) --
Dividends from net realized gain on investments............ (.99) (2.00) -- --
------ ------ ------ ------
Total Distributions........................................ (1.10) (2.21) (.32) --
------ ------ ------ ------
Net asset value, end of period............................. $21.35 $18.05 $15.46 $12.63
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN....................................... 25.29% 34.35% 25.73% 1.04%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................... 1.22% 1.25% .83% --
Ratio of net investment income to average net assets....... .41% .93% 1.64% 2.08%(2)
Decrease reflected in above expense ratios due to undertakings
by the Manager.......................................... .06% .32% 1.76% 2.01%(2)
Portfolio Turnover Rate.................................... 110.14% 186.39% 143.61% 48.35%(2)
Average commission rate paid(3)............................ $.0471 $.0471 -- --
Net Assets, end of period (000's Omitted).................. $161,960 $34,187 $6,687 $5,168
<FN>
- -----------------
(1) From December 29, 1993 (commencement of operations) to October 31, 1994.
(2) Not annualized.
(3) 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 Large Company Value Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Large Company Value 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 nine 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.
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.
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 and the difference between the amount 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 or 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) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the 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.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund may borrow up to $2 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. For the period ended October 31, 1997,
the Fund did not borrow under the lines 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. The Manager has undertaken from
November 1, 1996 through October 31, 1997 to reduce the management fee paid by
the Fund, to the extent that the Fund's aggregate expenses, exclusive of taxes,
brokerage, interest on borrowings and extraordinary expenses, exceed an annual
rate of 1.25% of the value of the Fund's average daily net assets. The reduction
in management fee, pursuant to the undertaking, amounted to $54,892 during the
period ended October 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 professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
October 31, 1997, the Fund was charged $248,642 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 $71,471 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 $32,356 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.
(d) Effective March 3, 1997, a 1% redemption fee is charged and retained by
the Fund on certain redemptions of Fund shares (including redemptions 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.
(e) During the period ended October 31, 1997, the Fund incurred total
brokerage commissions of $456,429, of which $47,101 was paid to
Dreyfus Investment Services Corporation, a subsidiary of Mellon.
<PAGE>
Dreyfus Large Company Value Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended October 31, 1997 amounted to $211,093,318 and $104,527,457,
respectively.
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.
(b) At October 31, 1997, accumulated net unrealized appreciation on
investments was $7,796,219, consisting of $16,407,565 gross unrealized
appreciation and $8,611,346 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 Large Company Value Fund
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Large Company Value Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Large Company Value Fund, one
of the series constituting Dreyfus Growth and Value Funds, Inc., 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 Large Company Value Fund 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 12, 1997
Important Tax Information (Unaudited)
For Federal tax purposes the Fund hereby designates $.105 per share as a
long-term capital gain distribution of the $1.095 per share paid on
December 10, 1996.
The Fund also designates 12.65% 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 Large Company
Value 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. 251AR9710
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS LARGE COMPANY VALUE FUND AND THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS STANDARD
LARGE & POOR'S 500
PERIOD COMPANY COMPOSITE STOCK
VALUE FUND PRICE INDEX*
12/29/93 10,000 10,000
10/31/94 10,104 10,360
10/31/95 12,704 13,096
10/31/96 17,068 16,250
10/31/97 21,385 21,466
*Source: Lipper Analytical Services, Inc.
