Dreyfus
Large Company
Value Fund
ANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
20 Report of Independent Auditors
21 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus
Large Company Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Large Company Value
Fund, covering the 12-month period from November 1, 1999 through October 31,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Timothy M. Ghriskey.
The Standard & Poor' s 500 Composite Stock Price Index, a broad measure of
large-cap stock performance, rose more than 6% over the 12-month reporting
period. Investor enthusiasm over technology stocks drove most major stock market
indices to new highs. Conversely, in the first nine months of 2000, the equity
investment environment was marked by dramatic price fluctuations. Additionally,
the moderating effects of the Federal Reserve Board's (the "Fed") interest-rate
hikes during the first half of 2000 helped the Fed to achieve its goal of
slowing the U.S. economy. Other factors such as higher energy prices and a weak
euro also served to slow economic growth.
Since stocks provided returns well above their historical averages during the
second half of the 1990s, some investors may have developed unrealistic
expectations in equities. Recent volatility has reminded investors of both the
risks of investing and the importance of fundamental research and investment
selection.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Large Company Value Fund.
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
DISCUSSION OF FUND PERFORMANCE
Timothy M. Ghriskey, Senior Portfolio Manager
How did Dreyfus Large Company Value Fund perform relative to its benchmark?
For the 12-month period ended October 31, 2000, the fund produced a total return
of 7.11% . (1) For the same period, the Russell 1000 Value Index, the fund's
benchmark, produced a total return of 5.52%.(2)
We attribute the fund' s good performance to several strong individual stock
selections. The fund also benefited from our decisions to emphasize certain
industry groups in light of their long-term growth prospects.
What is the fund's investment approach?
The fund invests primarily in large-capitalization, value-oriented companies. We
select investments one stock and one company at a time. Our investment process
starts with computerized, quantitative analysis of the universe of stocks, first
to identify those that appear underpriced in relation to their intrinsic values
and then to focus on those value stocks we believe are best positioned to grow
in the prevailing market environment. Our team of experienced analysts examines
the fundamentals of each top-ranked candidate, providing additional information
to help the portfolio manager decide which to purchase or sell.
In addition to identifying attractive investment opportunities, our approach is
designed to limit the risks associated with exposure to individual market
sectors. Instead of attempting to predict which industries or sectors are likely
to perform best in the near future, we allocate the fund's resources among
sectors in roughly the same proportions as our benchmark. However, we may choose
to moderately emphasize certain sectors that we believe offer greater long-term
growth prospects than the overall market.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund's performance during the first half of the period was largely driven by
a sharp rise in technology stocks. When many higher valuation technology and
Internet-related stocks failed to meet our value-oriented investment criteria,
we identified and invested in several large, well-established technology
companies, such as Intel and IBM, which did meet our standards. We allocated an
average of approximately 11.3% of the fund's assets to technology stocks during
the period as a whole, compared with approximately 6.5% for the Russell 1000
Value Index. Although many technology stocks suffered steep declines during the
second half of the period, including several of the fund's investments, our
technology holdings preserved a significant percentage of the gains achieved
earlier in the period.
From mid-March 2000 through the end of the period, market strength shifted from
technology to other industries and market sectors. The fund realized its
greatest gains during these months, with positive contributions from a wide
variety of industries, including financial services, communications services,
utilities and health care.
Financial services represented the fund's largest single group of holdings at an
average 23.4% of the portfolio. More specifically, we realized strong returns
from global institutions, such as Citigroup and The Bank of New York, as well as
insurers, such as Lincoln National and Exel Capital. In communications services,
we focused on fast-growing players, such as SBC Communications. Among utilities,
we concentrated on companies, such as Coastal and Dynergy, that were well
positioned to capitalize on rising energy prices. Our health care holdings
ranged from hospital groups, such as HCA, to pharmaceutical firms, such as ALZA
What is the fund's current strategy?
As of October 31, 2000, we have continued to allocate a relatively high
percentage of the fund's assets to value-oriented technology stocks. We believe
that technology remains a driving force behind U.S. economic growth, delivering
products that stimulate consumer spending, as well
4
as productivity enhancements that enable businesses to grow earnings while
limiting price increases. Although many technology stocks appear overpriced to
us compared to their intrinsic values, we have continued to find attractive
investment opportunities that meet our value-oriented investment criteria.
We have also continued to allocate a significant percentage of the fund's assets
to the financial group. Prices of financial stocks have benefited from rising
interest rates. We believe the sector's underlying fundamentals remain strong
and that shares of many leading companies offer attractive long-term investment
opportunities.
We are pleased that value stocks showed sustained strength during the second
half of the recent period. While we can't be sure this trend will continue, we
believe that value-oriented stocks remain attractively priced relative to
growth-oriented stocks, and we continue to maintain our strict commitment to
value investing.
November 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 1000 VALUE INDEX IS AN
UNMANAGED INDEX WHICH MEASURES THE PERFORMANCE OF THOSE RUSSELL 1000
COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH
VALUES.
The Fund 5
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Large Company
Value Fund with the Russell 1000 Value Index
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 10/31/00
<TABLE>
<CAPTION>
Inception From
Date 1 Year 5 Years Inception
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUND 12/29/93 7.11% 16.54% 15.82%
</TABLE>
((+)) SOURCE: LIPPER INC.
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 $10,000 INVESTMENT MADE ON THAT
DATE IN THE RUSSELL 1000 VALUE INDEX. FOR COMPARATIVE PURPOSES, THE VALUE OF THE
INDEX ON 12/31/93 IS USED AS THE BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND
CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THE RUSSELL 1000 VALUE INDEX MEASURES THE PERFORMANCE OF
THOSE RUSSELL 1000 COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER
FORECASTED GROWTH VALUES. THE RUSSELL 1000 INDEX MEASURES THE PERFORMANCE OF THE
1,000 LARGEST COMPANIES IN THE RUSSELL 3000 INDEX, WHICH REPRESENT APPROXIMATELY
89% OF THE TOTAL MARKET CAPITALIZATION OF THE RUSSELL 3000 INDEX.
THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER
INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF
APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS
AND ELSEWHERE IN THIS REPORT.
STATEMENT OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
COMMON STOCKS--97.8% Shares Value ($)
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<S> <C> <C>
BANKING--7.4%
Bank of America 24,100 1,158,306
Bank of New York 34,900 2,008,931
Chase Manhattan 25,500 1,160,250
FleetBoston Financial 13,700 520,600
Wells Fargo 47,000 2,176,688
7,024,775
COMMERCIAL SERVICES--.3%
McGraw-Hill Cos. 3,800 243,913
CONSUMER DURABLES--.5%
General Motors 8,125 504,766
CONSUMER NON-DURABLES--10.4%
Anheuser-Busch Cos. 21,900 1,001,925
Coca-Cola 8,400 507,150
Kimberly-Clark 8,300 547,800
Flowers Industries 28,300 435,112
NIKE, Cl. B 11,400 455,288
Nabisco Group Holdings 34,500 996,187
PepsiCo 18,700 905,781
Philip Morris Cos. 66,700 2,442,887
Procter & Gamble 19,800 1,414,463
UST 45,900 1,158,975
9,865,568
CONSUMER SERVICES--3.5%
Clear Channel Communications 4,900 (a) 294,306
Comcast, Cl. A 13,100 (a) 533,825
Disney (Walt) 47,400 1,697,512
Viacom, Cl. B 13,700 (a) 779,188
3,304,831
ELECTRONIC TECHNOLOGY--6.1%
Boeing 13,000 881,562
Compaq Computer 64,400 1,958,404
Hewlett-Packard 15,000 696,563
Intel 11,300 508,500
International Business Machines 7,700 758,450
Micron Technology 26,100 (a) 906,975
United Technologies 1,100 76,794
5,787,248
The Fund 7
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------
ENERGY MINERALS--6.7%
Anadarko Petroleum 8,700 557,235
Conoco, Cl. B 9,485 257,873
Exxon Mobil 53,021 4,728,810
Santa Fe International 21,400 781,100
6,325,018
FINANCE--23.4%
American Express 23,800 1,428,000
American General 12,100 974,050
American International Group 29,650 2,905,700
Associates First Capital 13,100 486,337
Bank One 26,400 963,600
Citigroup 97,000 5,104,625
Freddie Mac 18,200 1,092,000
Fannie Mae 10,200 785,400
Gallagher (Arthur J.) & Co. 16,000 1,010,000
Goldman Sachs Group 3,400 339,363
GreenPoint Financial 32,100 954,975
Household International 6,800 342,125
John Hancock Financial Services 8,800 278,300
MBNA 12,100 454,506
Marsh & McLennan Cos. 4,000 523,000
Merrill Lynch & Co. 12,000 840,000
Morgan Stanley Dean Witter & Co. 19,000 1,525,938
PartnerRe 17,800 970,100
USA Education 19,400 1,083,975
22,061,994
HEALTH SERVICES--1.1%
AmeriSource Health, Cl. A 9,900 (a) 430,031
HCA--The Healthcare Company 14,100 563,119
993,150
HEALTH TECHNOLOGY--10.2%
ALZA 11,000 (a) 890,313
Abbott Laboratories 20,400 1,077,375
Alpharma, Cl. A 23,800 923,737
American Home Products 6,400 406,400
Baxter International 5,800 476,688
Bristol-Myers Squibb 14,700 895,781
8
COMMON STOCKS (CONTINUED) Shares Value ($)
----------------------------------------------------------------------------------------------
HEALTH TECHNOLOGY (CONTINUED)
Johnson & Johnson 9,700 893,613
King Pharmaceuticals 34,100 (a) 1,528,106
Merck & Co. 17,600 1,582,900
Schering-Plough 17,500 904,531
9,579,444
NON-ENERGY MINERALS--.9%
Alcoa 30,800 883,575
PROCESS INDUSTRIES--2.9%
du Pont (EI) de Nemours 14,300 648,863
PPG Industries 11,600 517,650
Union Carbide 22,800 980,400
Willamette Industries 16,800 610,050
2,756,963
PRODUCER MANUFACTURING--5.2%
Emerson Electric 22,500 1,652,344
General Electric 13,500 739,969
Minnesota Mining & Manufacturing 6,100 589,412
Tyco International 34,300 1,944,381
4,926,106
RETAIL--2.5%
Costco Wholesale 12,900 (a) 472,462
Sears, Roebuck & Co. 31,800 945,414
Wal-Mart Stores 20,700 939,263
2,357,139
TECHNOLOGY SERVICES--.5%
LifePoint Hospitals 11,400 (a) 441,750
UTILITIES--16.2%
AES 9,000 (a) 508,500
AT&T 1 23
Coastal 19,100 1,440,856
Duke Energy 17,700 1,529,944
Dynegy 17,900 828,994
Enron 11,900 976,544
Qwest Communications International 10,608 (a) 515,814
SBC Communications 103,158 5,950,927
Southern 10,100 296,687
Southern Energy 20,700 564,075
The Fund 9
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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UTILITIES (CONTINUED)
Sprint (Fon Group) 9,800 249,900
Telefonos de Mexico, ADR 8,700 469,256
Verizon Communications 5,000 289,063
WorldCom 69,900 (a) 1,660,125
15,280,708
TOTAL COMMON STOCKS
(cost $71,157,938) 92,336,948
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Principal
SHORT-TERM INVESTMENTS--4.2% Amount ($) Value ($)
----------------------------------------------------------------------------------------------
U.S. TEASURY BILLS:
5.85%, 11/24/2000 86,000 85,672
6.13%, 12/7/2000 243,000 241,525
6.28%, 12/21/2000 206,000 204,185
6.16%, 12/28/2000 323,000 319,838
6.12%, 1/11/2001 2,559,000 2,528,062
6.14%, 1/18/2001 630,000 621,602
TOTAL SHORT-TERM INVESTMENTS
(cost $4,001,524) 4,000,884
--------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $75,159,462) 102.0% 96,337,832
LIABILITIES, LESS CASH AND RECEIVABLES (2.0%) (1,869,863)
NET ASSETS 100.0% 94,467,969
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
10
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 75,159,462 96,337,832
Cash 28,995
Receivable for investment securities sold 1,207,099
Dividends receivable 75,360
Receivable for shares of Common Stock subscribed 7,965
Prepaid expenses 3,326
97,660,577
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 91,169
Payable for investment securities purchased 3,013,607
Payable for shares of Common Stock redeemed 34,715
Accrued expenses 53,117
3,192,608
--------------------------------------------------------------------------------
NET ASSETS ($) 94,467,969
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 68,384,731
Accumulated undistributed investment income--net 447,151
Accumulated net realized gain (loss) on investments 4,457,717
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) 21,178,370
--------------------------------------------------------------------------------
NET ASSETS ($) 94,467,969
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 4,196,312
NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 22.51
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF OPERATIONS
Year Ended October 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $3,916 foreign taxes withheld at source) 1,575,614
Interest 90,761
TOTAL INCOME 1,666,375
EXPENSES:
Management fee--Note 3(a) 757,049
Shareholder servicing costs--Note 3(b) 370,861
Professional fees 31,039
Prospectus and shareholders' reports 25,766
Registration fees 16,424
Custodian fees--Note 3(b) 14,032
Interest expense--Note 2 5,778
Directors' fees and expenses--Note 3(c) 3,200
Miscellaneous 9,576
TOTAL EXPENSES 1,233,725
INVESTMENT INCOME--NET 432,650
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 5,024,392
Net realized gain (loss) on financial futures (19,330)
NET REALIZED GAIN (LOSS) 5,005,062
Net unrealized appreciation (depreciation) on investments 916,298
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 5,921,360
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,354,010
SEE NOTES TO FINANCIAL STATEMENTS.
12
STATEMENT OF CHANGES IN NET ASSETS
Year Ended October 31,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 432,650 772,415
Net realized gain (loss) on investments 5,005,062 14,049,725
Net unrealized appreciation (depreciation)
on investments 916,298 4,265,714
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 6,354,010 19,087,854
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (635,497) (575,758)
Net realized gain on investments (14,240,000) --
TOTAL DIVIDENDS (14,875,497) (575,758)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 20,623,556 45,354,543
Dividends reinvested 14,415,522 548,869
Cost of shares redeemed (53,910,211) (78,366,773)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (18,871,133) (32,463,361)
TOTAL INCREASE (DECREASE) IN NET ASSETS (27,392,620) (13,951,265)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 121,860,589 135,811,854
END OF PERIOD 94,467,969 121,860,589
Undistributed investment income--net 447,151 649,998
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 958,320 1,953,625
Shares issued for dividends reinvested 681,585 25,040
Shares redeemed (2,512,924) (3,307,066)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (873,019) (1,328,401)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Year Ended October 31,
-----------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 24.04 21.23 21.35 18.05 15.46
Investment Operations:
Investment income--net .09(a) .13(a) .09 .07 .12
Net realized and unrealized
gain (loss) on investments 1.42 2.77 .91 4.33 4.68
Total from Investment Operations 1.51 2.90 1.00 4.40 4.80
Distributions:
Dividends from investment income--net (.13) (.09) (.06) (.11) (.21)
Dividends from net realized gain
on investments (2.91) -- (1.06) (.99) (2.00)
Total Distributions (3.04) (.09) (1.12) (1.10) (2.21)
Net asset value, end of period 22.51 24.04 21.23 21.35 18.05
-----------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 7.11 13.71 4.83 25.29 34.35
-----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.22 1.25 1.24 1.22 1.25
Ratio of interest expense to
average net assets .01 .01 -- -- --
Ratio of net investment income
to average net assets .43 .55 .36 .41 .93
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- -- .06 .32
Portfolio Turnover Rate 152.15 141.99 156.72 110.14 186.39
------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 94,468 121,861 135,812 161,960 34,187
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
14
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Large Company Value Fund (the "fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nine series including the fund. The fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the fund's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, 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 Fund 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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. Under the terms of the custody agreement, the fund received net
earnings credits of $1,011 during the period ended October 31, 2000 based on
available cash balances left on deposit. Interest earned under this arrangement
is included in interest income.
(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
16
of 1986, as amended (the "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.
(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 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.
The average daily amount of borrowings outstanding under both arrangements
during the period ended October 31, 2000 was approximately $92,400, with a
related weighted average annualized interest rate of 6.25%.
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 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 pro-
The Fund 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fessional) in respect of these services. The distributor determines the amounts
to be paid to Service Agents. During the period ended October 31, 2000, the fund
was charged $252,350 pursuant to the Shareholder Services Plan, of which
$159,900 was paid to DSC.
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, 2000, the fund was charged $128,401 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 2000, the fund was
charged $14,032 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 25, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each meeting attended
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 25, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the Company an annual
fee of $5,000 and an attendance fee of $500 per meeting. The Chairman of the
Board received an additional 25% of such compensation. Subject to the fund's
Emeritus Program Guidelines, Emeritus Board members, if any, receive 50% of the
Company' s annual retainer fee and per meeting fee paid at the time the Board
member achieves emeritus status.
(d) A 1% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. Prior to June 1, 2000, this
fee was chargeable within fifteen days following the date of issuance of such
shares.
18
(e) During the period ended October 31, 2000, the fund incurred total brokerage
commissions of $336,104, of which $14,716 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
October 31, 2000, amounted to $151,994,719 and $186,367,456, respectively.
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.
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. Typically, 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. At October 31, 2000, there were no financial
futures contracts outstanding.
(b) At October 31, 2000, accumulated net unrealized appreciation on investments
was $21,178,370, consisting of $22,193,299 gross unrealized appreciation and
$1,014,929 gross unrealized depreciation.
At October 31, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund 19
REPORT OF 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,
2000, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of October
31, 2000 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, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with accounting principles generally accepted
in the United States.
New York, New York
December 8, 2000
20
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes, the fund hereby designates $1.6540 per share as a
long-term capital gain distribution of the $3.0430 per share paid on December
10, 1999.
In accordance with Federal tax law, the fund hereby designates 33.00% of the
ordinary dividends paid during the fiscal year ended October 31, 2000 as
qualifying for the corporate dividends received deduction. Shareholders will
receive notification in January 2001 of the percentage applicable to the
preparation of their 2000 income tax returns.
The Fund 21
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 251AR0010
Dreyfus
Small Company
Value Fund
ANNUAL REPORT October 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
20 Report of Independent Auditors
21 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Small Company Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Small Company Value
Fund, covering the 12-month period from November 1, 1999 through October 31,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Peter Higgins.
The Russell 2000 Index, a broad measure of small-cap stock performance, rose
more than 17% over the 12-month reporting period. Investor enthusiasm over
technology stocks drove the market to new highs. Conversely, in the first nine
months of 2000, the small-cap investment environment was marked by dramatic
price fluctuations. Additionally, the moderating effects of the Federal Reserve
Board's (the "Fed") interest-rate hikes during the first half of 2000 helped the
Fed to achieve its goal of slowing the U.S. economy. Other factors such as
higher energy prices and a weak euro also served to slow economic growth
In our view, the stock market's recent weakness is a reminder that 20% annual
gains are not the norm, historically speaking. Since stocks provided returns
well above their historical averages during the second half of the 1990s, some
investors may have developed unrealistic expectations in equities. Recent
volatility has reminded investors of both the risks of investing and the
importance of fundamental research and investment selection.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Small Company Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 2000
2
DISCUSSION OF FUND PERFORMANCE
Peter Higgins, Portfolio Manager
How did Dreyfus Small Company Value Fund perform relative to its benchmark?
For the 12-month period ended October 31, 2000, the fund produced a total return
of 23.78%.(1) In comparison, the fund's benchmark, the Russell 2000 Value Index,
produced a total return of 17.30% for the same period.(2)
We attribute the fund' s strong performance to our ability to uncover many
value-oriented companies in a variety of industries, such as energy and retail,
that later appreciated in price. In addition, the fund benefited from a show of
investor preference for value versus growth stocks, particularly during the
second half of the reporting period.
What is the fund's investment approach?
Our focus is to identify inexpensive stocks with solid long-term fundamentals
and improving prospects. The process includes searching for companies with low
price-to-earnings (" P/E" ) ratios, defined as low stock prices in relation to
expected earnings. To do this, we compare a company's P/E ratio to its own
historical averages as well as to other companies in the same industry. We then
develop an earnings estimate for each investment candidate, and focus on those
companies that we think can do better than the average expectations of Wall
Street analysts. Our approach includes meeting with corporate management,
competitors and suppliers of these companies to identify positive trends before
they become widely known in the investment community.
What other factors influenced the fund's performance?
Many areas of the marketplace offered significant value opportunities that
helped contribute to the fund's strong performance. For example, the energy area
was especially intriguing because the industry's stock prices did not reflect
soaring oil prices. That's because early in the
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
reporting period, investors remained focused on technology stocks, dismissing
energy stocks as part of the "old economy." During that period we increased our
weighting in the energy services area, a move that allowed us to take advantage
of numerous bargain investment opportunities. By mid-March when technology
stocks sold off sharply, investors began to turn their attention to other
sectors, like energy. Since early 2000, many of the fund's energy investments,
particularly its oil drilling companies, have performed very well, increasing
the fund' s overall returns.
Another area that benefited the fund was our exposure to the retail sector,
which had been penalized in 1999 because investors believed that the Internet
might render the traditional "brick and mortar" retailers obsolete. Instead of
being a threat, many of these Internet companies have since gone out of
business, thereby eliminating the threat. In addition, the year-end holiday
season has traditionally been a favorable period for retailers.
Although the fund' s allocation to technology stocks was significantly greater
than that of the Index during the entire reporting period, the decline of tech
stocks was another factor that had a marked effect on the fund's relative
performance. Since March, the fund's large exposure to technology stocks held
back our performance. Investors concerned about a slowing economy shifted their
attention to more conservative areas of the market. While our portfolio owns
inexpensive tech stocks, our performance was hindered by this shift in investor
sentiment out of the technology sector.
One way for companies to boost their earnings is to outsource non-core
activities. For example, a beverage company might contract with an outside firm
to perform all of its information technology tasks. Early in the fiscal year, we
invested in several such "contract" information technology services companies
because we thought they would do well after the Y2K period, a period in which
technology budgets were frozen. The upswing did not take place, and as a result,
our investments in these stocks declined later in the period. However, we are
confident that these stocks represent good value and have chosen to remain
invested in this area.
4
What is the fund's current strategy?
While macroeconomic factors such as inflation, interest rates and economic
growth can affect the fund's performance, our strategy is to select stocks for
the fund on a company-by-company basis, with emphasis given to a stock's
individual merits.
As the reporting period came to a close, we increased our exposure to several of
our holdings in semiconductor capital equipment stocks, which we believe offered
compelling values. These companies manufacture the equipment used by
semiconductor companies, the "chips" that power personal computers,
communications devices and other electronic products. Historically,
semiconductor capital equipment stocks are considered cyclical stocks, meaning
that their fortunes rise and fall according to the economy's growth rate. Since
the economy has slowed, these stocks have fallen in price and, in our view,
currently represent very attractive investment opportunities for the fund
November 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER INC. -- REFLECTS THE REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2000 VALUE INDEX IS AN
UNMANAGED INDEX WHICH MEASURES THE PERFORMANCE OF THOSE RUSSELL 2000
COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH
VALUES.
The Fund 5
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Small Company
Value Fund and the Russell 2000 Value Index
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 10/31/00
<TABLE>
<CAPTION>
Inception From
Date 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUND 12/29/93 23.78% 17.81% 15.86%
</TABLE>
((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS SMALL COMPANY
VALUE FUND ON 12/29/93 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE ON THAT
DATE IN THE RUSSELL 2000 VALUE INDEX. FOR COMPARATIVE PURPOSES, THE VALUE OF THE
INDEX ON 12/31/93 IS USED AS THE BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND
CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THE RUSSELL 2000 VALUE INDEX IS AN UNMANAGED INDEX OF
SMALL-CAP VALUE STOCK PERFORMANCE.
THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER
INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF
APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS
AND ELSEWHERE IN THIS REPORT.
6
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
October 31, 2000
COMMON STOCKS--100.2% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BASIC INDUSTRIES--8.7%
AK Steel Holding 192,100 1,776,925
Agrium 489,600 5,110,200
Crompton 396,700 3,173,600
Gaylord Container, Cl. A 528,200 (a) 1,155,437
Georgia Gulf 84,700 1,132,862
Hercules 52,700 965,069
PolyOne 554,500 4,366,687
TETRA Technologies 292,400 (a) 4,221,525
UCAR International 81,000 (a) 668,250
Wellman 259,800 3,897,000
26,467,555
CAPITAL GOODS--8.5%
AGCO 124,800 1,419,600
ANTEC 73,300 (a) 893,344
Allen Telecom 370,200 (a) 6,918,112
CommScope 161,400 (a) 4,085,437
DONCASTERS, ADS 162,800 (a) 2,930,400
Flowserve 168,900 3,399,112
Foster Wheeler 271,000 1,998,625
Pentair 75,800 2,259,787
Wolverine Tube 141,000 (a) 1,921,125
25,825,542
CONSUMER DURABLES--3.5%
BE Aerospace 105,800 (a) 1,745,700
Midway Games 404,100 (a) 3,131,775
Quiksilver 172,000 (a) 3,289,500
Snap-On 95,000 2,428,437
10,595,412
CONSUMER NON-DURABLES--5.9%
Dial 98,900 1,106,444
Furniture Brands International 99,700 (a) 1,682,438
NBTY 187,100 (a) 1,216,150
Rayovac 143,700 (a) 2,119,575
Reebok International 207,900 (a) 4,482,844
Russell 25,300 404,800
The Fund 7
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES (CONTINUED)
Tommy Hilfiger 401,400 (a) 4,666,275
Vans 100,200 (a) 1,296,337
Wolverine World Wide 94,600 1,022,863
17,997,726
CONSUMER SERVICES--23.6%
Abercrombie & Fitch, Cl. A 103,900 (a) 2,448,144
Borders Group 77,400 (a) 1,073,925
Brown Shoe 90,500 888,031
Burlington Coat Factory Warehouse 172,100 2,710,575
Citadel Communications 177,800 (a) 2,155,825
Emmis Communications, Cl. A 218,450 (a) 5,843,537
Entercom Communications 154,600 (a) 6,058,387
Finish Line, Cl. A 244,400 (a) 1,863,550
Finlay Enterprises 154,300 (a) 2,140,913
Fleming Cos. 271,600 3,853,325
Footstar 33,100 (a) 1,187,463
Information Resources 161,000 (a) 855,313
Landry's Seafood Restaurants 166,800 1,344,825
Michaels Stores 135,800 (a) 3,301,637
OfficeMax 804,300 (a) 2,312,363
Outback Steakhouse 100,400 (a) 2,861,400
Pacific Sunwear of California 159,300 (a) 3,265,650
Papa John's International 73,000 (a) 1,834,125
Profit Recovery Group International 250,200 (a) 1,344,825
Regis 259,700 3,927,963
Ross Stores 159,000 2,096,812
School Specialty 183,500 (a) 2,821,313
Six Flags 339,000 (a) 5,296,875
Sunglass Hut International 351,800 (a) 2,726,450
Valassis Communications 76,000 (a) 2,109,000
Watson Wyatt & Co. Holdings 21,690 375,508
Wet Seal, Cl. A 175,000 (a) 3,281,250
Williams-Sonoma 74,700 (a) 1,554,694
71,533,678
ENERGY--11.0%
Core Laboratories 63,800 (a) 1,375,688
Global Industries 197,600 (a) 2,074,800
8
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Key Energy Services 756,300 (a) 6,806,700
Newpark Resources 373,000 (a) 3,357,000
Ocean Energy 347,000 (a) 4,814,625
Oceaneering International 55,200 (a) 776,250
Offshore Logistics 159,700 (a) 2,754,825
Parker Drilling 388,700 (a) 2,332,200
Seitel 310,700 (a) 4,660,500
Trico Marine Services 261,200 (a) 4,342,450
33,295,038
FINANCIAL SERVICES--1.1%
Everest Re Group 42,300 2,479,837
NCO Group 43,200 (a) 945,000
3,424,837
HEALTH CARE--3.4%
Apria Healthcare Group 220,500 (a) 4,410,000
Bergen Brunswig, Cl. A 383,400 3,474,563
Manor Care 142,400 (a) 2,376,300
10,260,863
MERCHANDISING--.8%
Venator Group 165,100 (a) 2,332,037
SEMICONDUCTORS & EQUIPMENT--9.6%
Actel 75,400 (a) 2,761,525
Applied Science and Technology 175,300 (a) 2,519,938
Brooks Automation 109,700 (a) 2,907,050
Credence Systems 348,200 (a) 6,528,750
General Semiconductor 127,000 (a) 1,452,563
Mattson Technology 354,900 (a) 4,170,075
Ultratech Stepper 155,800 (a) 3,661,300
Varian Semiconductor Equipment Associates 223,600 (a) 5,142,800
29,144,001
TECHNOLOGY--23.3%
Artesyn Technologies 50,800 (a) 2,063,750
Avnet 191,100 5,135,813
CTS 124,500 5,345,719
FileNET 153,400 (a) 4,065,100
Gartner Group, Cl. A 402,900 (a) 3,827,550
General DataComm Industries 256,600 (a) 833,950
The Fund 9
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Hypercom 298,000 (a) 2,048,750
Hyperion Solutions 125,000 (a) 1,750,000
Informix 383,150 (a) 1,628,387
Keane 84,700 (a) 1,101,100
Kent Electronics 225,300 (a) 4,196,213
Legato Systems 228,500 (a) 2,035,078
MarchFIRST 459,800 (a) 2,672,588
Maxtor 239,600 (a) 1,871,875
Mentor Graphics 186,800 (a) 4,378,125
Perot Systems, Cl. A 179,900 (a) 1,787,756
Pioneer Standard Electronics 198,500 2,754,188
Project Software & Development 129,300 (a) 1,680,900
Quantum--Hard Disk Drive 624,700 (a) 7,145,006
Renaissance Worldwide 818,200 (a) 1,022,750
S3 130,700 (a) 1,180,384
Silicon Graphics 460,300 (a) 2,071,350
Structural Dynamics Research 292,100 (a) 3,012,281
Systems & Computer Technology 270,800 (a) 3,909,675
Trimble Navigation 131,100 (a) 3,113,625
70,631,913
TRANSPORTATION--.8%
Yellow 127,300 (a) 2,291,400
TOTAL COMMON STOCKS
(cost $284,990,364) 303,800,002
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--.9% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S.TREASURY BILLS:
6.08%, 12/7/2000 715,000 710,660
6.10%, 12/21/2000 1,397,000 1,384,693
6.10%, 1/4/2001 771,000 762,619
TOTAL SHORT-TERM INVESTMENTS
(cost $2,858,456) 2,857,972
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $287,848,820) 101.1% 306,657,974
LIABILITIES, LESS CASH AND RECEIVABLES (1.1%) (3,322,464)
NET ASSETS 100.0% 303,335,510
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
10
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 287,848,820 306,657,974
Cash 978,689
Receivable for investment securities sold 4,802,293
Receivable for shares of Common Stock subscribed 67,847
Dividends receivable 61,382
Prepaid expenses 9,821
312,578,006
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 282,885
Payable for investment securities purchased 8,804,928
Interest payable--Note 2 15,008
Payable for shares of Common Stock redeemed 7,359
Accrued expenses 132,316
9,242,496
--------------------------------------------------------------------------------
NET ASSETS ($) 303,335,510
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 267,230,309
Accumulated net realized gain (loss) on investments 17,296,047
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 18,809,154
--------------------------------------------------------------------------------
NET ASSETS ($) 303,335,510
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 12,624,637
NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 24.03
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF OPERATIONS
Year Ended October 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $1,828 foreign taxes withheld at source) 1,865,092
Interest 33,829
TOTAL INCOME 1,898,921
EXPENSES:
Management fee--Note 3(a) 2,267,541
Shareholder servicing costs--Note 3(b) 1,068,030
Interest expense--Note 2 110,162
Custodian fees--Note 3(b) 58,698
Prospectus and shareholders' reports 54,249
Professional fees 32,280
Registration fees 17,404
Directors' fees and expenses--Note 3(c) 6,139
Miscellaneous 3,327
TOTAL EXPENSES 3,617,830
INVESTMENT (LOSS) (1,718,909)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 26,952,788
Net unrealized appreciation (depreciation) on investments 36,807,976
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 63,760,764
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 62,041,855
SEE NOTES TO FINANCIAL STATEMENTS.
12
STATEMENT OF CHANGES IN NET ASSETS
Year Ended October 31,
-----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (1,718,909) (2,365,649)
Net realized gain (loss) on investments 26,952,788 16,860,336
Net unrealized appreciation (depreciation)
on investments 36,807,976 46,041,133
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 62,041,855 60,535,820
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (18,245,311) --
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 52,661,143 79,672,928
Dividends reinvested 17,817,025 --
Cost of shares redeemed (80,571,640) (171,484,720)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (10,093,472) (91,811,792)
TOTAL INCREASE (DECREASE) IN NET ASSETS 33,703,072 (31,275,972)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 269,632,438 300,908,410
END OF PERIOD 303,335,510 269,632,438
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 2,282,681 3,923,980
Shares issued for dividends reinvested 850,455 --
Shares redeemed (3,523,250) (8,550,678)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (390,114) (4,626,698)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 20.72 17.06 21.95 17.66 14.00
Investment Operations:
Investment income (loss)-net (.13)(a) (.16)(a) (.09)(a) -- .07
Net realized and unrealized
gain (loss) on investments 4.85 3.82 (4.39) 6.43 4.69
Total from Investment Operations 4.72 3.66 (4.48) 6.43 4.76
Distributions:
Dividends from investment income--net -- -- (.02) (.04) (.09)
Dividends from net realized gain
on investments (1.41) -- (.39) (2.10) (1.01)
Total Distributions (1.41) -- (.41) (2.14) (1.10)
Net asset value, end of period 24.03 20.72 17.06 21.95 17.66
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 23.78 21.45 (20.83) 40.22 35.99
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.16 1.23 1.21 1.23 1.27
Ratio of interest expense and dividends on
securities sold short to average net assets .04 .05 .01 .02 .02
Ratio of net investment income (loss)
to average net assets (.57) (.78) (.44) .22 .62
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- -- .05 .41
Portfolio Turnover Rate 169.12 170.38 132.38 76.11 183.58
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Net Assets, end of period ($ x 1,000) 303,336 269,632 300,908 376,738 16,852
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
14
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Small Company Value Fund (the "fund") is a separate diversified series
of Dreyfus Growth and Value Funds, Inc. (the "Company") which is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering nine series, including the fund. The fund's investment objective is
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the fund's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, 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 Fund 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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. Under the terms of the custody agreement, the fund receives net
earnings credits based on available cash balances left on deposit.
(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 of 1986, as amended (the "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.
16
(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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
During the period ended October 31, 2000, as a result of permanent book to tax
differences, the fund reclassed the current year investment loss of $1,718,909
to paid-in capital. Net assets were not affected by this reclassification.
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.
The average daily amount of borrowings outstanding under both arrangements
during the period ended October 31, 2000 was approximately $1,658,100, with a
related weighted average annualized interest rate of 6.64%.
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 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
The Fund 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2000,
the fund was charged $755,847 pursuant to the Shareholder Services Plan, of
which $515,628 was paid to DSC.
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, 2000, the fund was charged $185,651 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 2000, the fund was
charged $58,698 pursuant to the custody agreement.
(C) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 25, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each meeting attended
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 25, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the Company an annual
fee of $5,000 and an attendance fee of $500 per meeting. The Chairman of the
Board received an additional 25% of such compensation. Subject to the fund's
Emeritus Program Guidelines, Emeritus Board members, if any, receive 50% of the
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
(D) A 1% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. Prior to June 1, 2000, this
fee was chargeable within fifteen days following the date of issuance.
18
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 2000, amounted to
$511,001,628 and $531,603,000, respectively.
At October 31, 2000, accumulated net unrealized appreciation on investments was
$18,809,154, consisting of $43,549,073 gross unrealized appreciation and
$24,739,919 gross unrealized depreciation.
At October 31, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund 19
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors Dreyfus Small Company Value Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Small Company Value Fund (one of the
series constituting Dreyfus Growth and Value Funds, Inc.) as of October 31,
2000, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of October
31, 2000 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 Small Company Value Fund at October 31, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with accounting principles generally accepted
in the United States.
New York, New York
December 8, 2000
20
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designated 8.15% of the
ordinary dividends paid during the fiscal year ended October 31, 2000 as
qualifying for the corporate dividends received deduction. Shareholders will
receive notification in January 2001 of the percentage applicable to the
preparation of their 2000 tax returns.
The Fund 21
For More Information
Dreyfus Small 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 253AR0010
