0000914775-01-500017.txt : 20011112 0000914775-01-500017.hdr.sgml : 20011112 ACCESSION NUMBER: 0000914775-01-500017 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010831 FILED AS OF DATE: 20011105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS GROWTH & VALUE FUNDS INC CENTRAL INDEX KEY: 0000914775 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07123 FILM NUMBER: 1775056 BUSINESS ADDRESS: STREET 1: THE DREYFUS CORPORATION STREET 2: 200 PARK AVENUE 8TH FLOOR WEST CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226754 MAIL ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS FOCUS FUNDS INC DATE OF NAME CHANGE: 19940304 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS GROWTH & VALUE FUND INC DATE OF NAME CHANGE: 19931116 N-30D 1 lp1-250.txt ANNUAL REPORT TO THE SEC Dreyfus Aggressive Growth Fund ANNUAL REPORT August 31, 2001 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 Chairman 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 19 Report of Independent Auditors FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Aggressive Growth Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Aggressive Growth Fund covers the 12-month period from September 1, 2000 through August 31, 2001. 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, Kevin Sonnett, CFA. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Kevin Sonnett, CFA, Portfolio Manager How did Dreyfus Aggressive Growth Fund perform relative to its benchmark? For the 12-month period ended August 31, 2001, the fund produced a total return of -44.84%.(1) This compares to the Standard & Poor's 500 Composite Stock Price Index' s total return of -24.38% and the Russell Midcap Growth Index's total return of -45.04% for the same period.(2,3) Since the fund is currently focusing on midcap growth stocks, we believe that the Russell Midcap Growth Index (the " Index" ) is an appropriate measure of the fund's performance for comparison purposes. We attribute the fund's disappointing absolute returns to a severe bear market, particularly among the midcap growth stocks in which the fund was primarily invested. Growth-oriented technology stocks -- which represented approximately one-third of the fund' s total assets during the reporting period -- were particularly hard-hit. What is the fund's investment approach? The fund seeks capital appreciation by investing in the stocks of growth companies of any size. Currently, the fund is focusing on midcap growth companies. In choosing stocks, the fund uses a "bottom-up" approach that emphasizes individual stock selection over economic and industry trends. In particular, the fund looks for companies with strong management, innovative products and services, superior industry positions and the potential for strong revenue and earnings growth rates. The fund's investments in small- and midcap companies carry additional risks because their earnings are less predictable, their share prices are more volatile, and their securities are less liquid than those of larger companies. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What factors influenced the fund's performance? The decline of technology and telecommunications stocks represented the primary factor contributing to the fund's returns during the reporting period. Over the past four or five years, these types of companies have been subject to a flood of capital from corporations that set out to build their organizations' Internet infrastructures. In order to meet robust demand for their products, many of these technology and telecommunications companies maintained high product inventory levels. In mid-2000, however, when the U.S. economy began to show signs of slowing, corporations began to curtail their capital spending severely. As corporate spending slowed, demand for technology and telecommunications products slackened, and many technology companies were saddled with excess inventory amid declining sales. Disappointed investors quickly abandoned these companies, suddenly creating a shortage of capital for many businesses that had not yet completed building their infrastructures. As some of these businesses teetered on the brink of insolvency, demand for technology products weakened further, leaving even profitable, well-established technology and telecommunications providers with a glut of unsold products and depressed stock prices. At the same time, disappointing returns from other types of companies hurt by a slowing economy further hampered the fund's performance during the reporting period. Among those hardest hit were consumer cyclical companies, including wireless services providers and retailers. For example, when the larger wireless phone companies stopped building new bay stations, providers of consulting and engineering services saw sales, profits and stock prices plummet. Retailers also suffered in this environment when consumers became increasingly concerned about possible job losses and high personal debt levels. On the other hand, the health care group represented the largest positive contributor to the fund' s performance in an otherwise difficult environment. While we began the period with a relatively light exposure to the health care group, we steadily increased our exposure to this area. As of the end of the period, health care represented almost one-third of the fund' s total assets. What is the fund's current strategy? As the U.S. economy has continued to slow, we've taken steps to position the fund more defensively. For example, we have increased the fund's exposure to stocks within the health care area. Regardless of what is happening in the economy, we believe that individuals must continue to attend to their medical needs, thereby supporting sales and revenues for health care providers, even during downturns. We have also boosted the fund's exposure to financial stocks, which we believe will benefit from a lower interest-rate environment. On the other hand, we have trimmed our exposure to technology and consumer cyclical stocks. Together, these four areas represent almost 80% of the fund's total assets. We have also continued to focus more intently on valuations in our search for companies that not only possess good earnings growth rates but also have levels of high predictability and visibility for those earnings. September 17, 2001 (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. PART OF THE FUND'S RECENT PERFORMANCE IS ATTRIBUTABLE TO ITS INITIAL PUBLIC OFFERING (IPO) INVESTMENTS. THERE CAN BE NO GUARANTEE THAT IPOS WILL HAVE OR CONTINUE TO HAVE A POSITIVE EFFECT ON THE FUND'S PERFORMANCE. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH OCTOBER 31, 2001, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF 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. (3) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL MIDCAP GROWTH INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE AND MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED GROWTH VALUES. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Aggressive Growth Fund and the Standard & Poor's 500 Composite Stock Price Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ------------------------------------------------------------------------------------------------------------------------------------ FUND 9/29/95 (44.84)% (17.44)% (5.92)% (+) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS AGGRESSIVE GROWTH FUND ON 9/29/95 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX (THE "INDEX") ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF OVERALL STOCK MARKET PERFORMANCE WHICH DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--95.8% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--.4% Embraer--Empresa Brasileira de Aeronautica, ADS 3,575 93,307 AIR FREIGHT--1.1% Expeditors International of Washington 4,950 251,757 BANKS--1.1% Zions Bancorporation 4,725 270,553 BIOTECHNOLOGY--6.1% Celgene 7,050 (a) 196,061 Cephalon 6,925 (a) 410,098 Human Genome Sciences 2,100 (a) 94,248 IDEC Pharmaceuticals 3,450 (a) 204,482 MedImmune 9,425 (a) 378,414 Protein Design Labs 2,475 (a) 145,505 1,428,808 BROADCASTING--3.4% Adelphia Communications, Cl. A 5,000 (a) 157,750 Charter Communications, Cl. A 18,075 (a) 365,115 Entercom Communications 6,650 (a) 278,170 801,035 COMMUNICATION EQUIPMENT--3.4% Comverse Technology 8,975 (a) 225,632 DMC Stratex Networks 29,700 (a) 282,744 Harris 10,075 295,500 803,876 COMPUTERS--13.5% Amdocs 5,625 (a) 215,437 BEA Systems 17,000 (a) 274,890 Brocade Communications Systems 6,050 (a) 145,502 Check Point Software Technologies 6,425 (a) 205,536 Emulex 2,125 (a) 33,809 Enterasys Networks 28,525 (a) 289,529 Macrovision 7,900 (a) 344,519 Mercury Interactive 5,475 (a) 147,880 Openwave Systems 5,125 (a) 82,205 Peregrine Systems 19,200 (a) 502,656 QLogic 6,475 (a) 194,315 Riverstone Networks 10,647 100,934 Siebel Systems 5,800 (a) 125,280 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- COMPUTERS (CONTINUED) TIBCO Software 14,850 (a) 127,265 VERITAS Software 8,000 (a) 229,760 VeriSign 4,000 (a) 164,200 3,183,717 CONSUMER FINANCE--3.5% AmeriCredit 10,775 (a) 497,374 Capital One Financial 6,050 336,440 833,814 ELECTRICAL EQUIPMENT--1.3% Celestica 8,575 (a) 312,130 ELECTRONICS--1.4% Cree 8,275 (a) 173,527 International Rectifier 4,125 (a) 152,542 326,069 FINANCIAL--3.1% Ambac Financial Group 12,200 722,240 GAMING, LOTTERY, & PARI-MUTUEL COMPANIES--1.1% Harrah's Entertainment 9,300 (a) 265,794 HEALTH CARE--24.6% Allergan 3,600 260,100 Andrx Group 12,000 (a) 843,480 Cytyc 17,400 (a) 421,602 Forest Laboratories 7,475 (a) 545,750 IVAX 20,856 (a) 702,013 Invitrogen 4,425 (a) 301,033 PerkinElmer 8,825 283,106 Quest Diagnostics 4,675 (a) 292,889 SICOR 9,875 (a) 233,050 Shire Pharmaceuticals Group, ADR 11,700 (a) 508,014 Teva Pharmaceutical Industries, ADR 8,900 632,790 Waters 10,225 (a) 338,754 Watson Pharmaceuticals 7,525 (a) 422,152 5,784,733 INVESTMENT BANKING & BROKERAGE--.3% Instinet Group 6,500 76,765 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT MANAGEMENT--1.9% BlackRock 2,275 (a) 86,564 Federated Investors, Cl. B 12,525 356,336 442,900 LEISURE TIME--1.3% Harley-Davidson 6,200 301,258 LODGING--2.5% Hilton Hotels 22,375 284,386 Starwood Hotels & Resorts Worldwide 8,975 303,804 588,190 MANAGED CARE--.8% Express Scripts 3,300 (a) 176,616 MANUFACTURING--.6% Danaher 2,625 145,871 METAL FABRICATORS--.5% Shaw Group 4,525 (a) 123,759 OIL & GAS--2.5% Apache 1,925 90,340 BJ Services 4,850 (a) 108,785 Hanover Compressor 6,275 (a) 158,507 Nabors Industries 3,625 (a) 88,885 Smith International 2,900 (a) 134,560 581,077 POWER PRODUCERS--2.9% Calpine 6,275 (a) 207,200 Orion Power Holdings 11,550 275,467 Reliant Resources 10,525 207,132 689,799 RESTAURANTS--.5% Darden Restaurants 4,150 118,773 RETAIL--6.4% Abercrombie & Fitch, Cl. A 7,400 (a) 224,516 American Eagle Outfitters 6,100 (a) 157,075 Best Buy 2,025 (a) 119,434 CDW Computer Centers 8,300 (a) 338,640 Fastenal 6,525 429,019 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- RETAIL (CONTINUED) Tech Data 5,500 (a) 224,950 1,493,634 SEMICONDUCTORS & EQUIPMENT--2.5% KLA-Tencor 5,225 (a) 256,757 Novellus Systems 3,200 (a) 141,792 Teradyne 5,950 (a) 195,041 593,590 SERVICES--8.1% Affiliated Computer Services, Cl. A 3,250 (a) 265,752 Apollo Group, Cl. A 4,150 (a) 163,385 CSG Systems International 4,400 (a) 201,960 Cintas 3,850 179,256 Convergys 11,750 (a) 329,822 DeVry 6,250 (a) 205,187 Fiserv 3,050 (a) 165,219 Lamar Advertising 4,600 (a) 147,660 Manpower 2,525 77,820 Titan 8,750 (a) 162,313 1,898,374 TELECOMMUNICATIONS--1.0% Research In Motion 3,300 (a) 55,638 Time Warner Telecom, Cl. A 8,275 (a) 170,630 226,268 TOTAL COMMON STOCKS (cost $25,755,161) 22,534,707 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--3.8% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER; Ciesco, 3.70%, 9/4/2001 (cost $894,724) 895,000 894,724 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $26,649,885) 99.6% 23,429,431 CASH AND RECEIVABLES (NET) .4% 91,123 NET ASSETS 100.0% 23,520,554 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 26,649,885 23,429,431 Cash 70,809 Receivable for investment securities sold 337,276 Dividends receivable 2,363 Receivable for shares of Common Stock subscribed 1,104 Prepaid expenses 15,897 23,856,880 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 25,170 Payable for investment securities purchased 241,358 Payable for shares of Common Stock redeemed 30,578 Accrued expenses 39,220 336,326 ------------------------------------------------------------------------------- NET ASSETS ($) 23,520,554 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 91,560,803 Accumulated net realized gain (loss) on investments (64,819,795) Accumulated net unrealized appreciation (depreciation) on investments--Note 4 (3,220,454) ------------------------------------------------------------------------------- NET ASSETS ($) 23,520,554 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 2,701,767 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 8.7 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Interest 174,557 Cash dividends (net of $170 foreign taxes withheld at source) 26,396 TOTAL INCOME 200,953 EXPENSES: Management fee--Note 3(a) 235,395 Shareholder servicing costs--Note 3(b) 170,597 Auditing fees 24,357 Prospectus and shareholders' reports 16,236 Registration fees 16,141 Custodian fees--Note 3(b) 14,839 Legal fees 5,254 Directors' fees and expenses--Note 3(c) 2,465 Miscellaneous 1,934 TOTAL EXPENSES 487,218 Less--reduction in management fee due to undertaking--Note 3(a) (110,586) NET EXPENSES 376,632 INVESTMENT (LOSS) (175,679) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments (11,654,642) Net unrealized appreciation (depreciation) on investments (8,779,702) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (20,434,344) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (20,610,023) SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, --------------------------------- 2001 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (175,679) (287,885) Net realized gain (loss) on investments (11,654,642) 11,105,479 Net unrealized appreciation (depreciation) on investments (8,779,702) 2,392,398 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (20,610,023) 13,209,992 ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 10,965,210 35,836,387 Cost of shares redeemed (13,901,838) (32,424,372) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (2,936,628) 3,412,015 TOTAL INCREASE (DECREASE) IN NET ASSETS (23,546,651) 16,622,007 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 47,067,205 30,445,198 END OF PERIOD 23,520,554 47,067,205 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 995,045 2,422,524 Shares redeemed (1,273,170) (2,252,064) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (278,125) 170,460 SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements.
Year Ended August 31, ------------------------------------------------------------------ 2001 2000 1999 1998 1997 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 15.79 10.84 8.57 20.07 22.71 Investment Operations: Investment (loss) (.06)(a) (.10)(a) (.07)(a) (.16)(a) (.26) Net realized and unrealized gain (loss) on investments (7.02) 5.05 2.34 (11.34) (2.38) Total from Investment Operations (7.08) 4.95 2.27 (11.50) (2.64) Net asset value, end of period 8.71 15.79 10.84 8.57 20.07 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (44.84) 45.66 26.64 (57.30) (11.63) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 1.20 1.20 1.13 1.27 1.34 Ratio of interest expense to average net assets -- -- -- .00(b) .39 Ratio of investment (loss) to average net assets (.56) (.70) (.71) (.95) (1.62) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .35 .35 .58 .29 .09 Portfolio Turnover Rate 228.10 215.99 168.00 86.53 76.45 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 23,521 47,067 30,445 30,968 131,604 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Aggressive Growth 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 eleven 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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, 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 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 Board of Directors. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including 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 $4,633 during the period ended August 31, 2001 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. (C) 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, it is the policy of the fund not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. The fund has unused capital loss carryover of approximately $54,191,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to August 31, 2001. This amount is calculated based on Federal income tax regulations which may differ from financial reporting in accordance with accounting principles generally accepted in the United States. If not applied, $490,000 of the carryover expires in fiscal 2005, $1,778,000 expires in fiscal 2006 and $51,923,000 expires in fiscal 2007. During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $175,679 and decreased paid-in capital by the same amount. Net assets were not affected by this reclassification. NOTE 2--Bank Line of Credit: The fund 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 based on prevailing market rates in effect at the time of borrowings. During the period ended August 31, 2001, the fund did not borrow under the line of credit. NOTE 3--Management Fee and Other Transactions With Affiliates: (A) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .75 of 1% of the value of the fund's average daily net assets and is payable monthly. The Manager has undertaken, from September 1, 2000 through October 31, 2001, to reduce the management fee paid by the fund, to the extent that the fund's aggregate expenses, exclusive of taxes, brokerage fees, interest on borrowings and extraordinary expenses, exceed an annual rate of 1.20% of the value of the fund's average daily net assets. The reduction in management fee, pursuant to the undertaking, amounted to $110,586 during the period ended August 31, 2001. (B) Under the Shareholder Services Plan, the fund pays the Distributor at an annual rate of .25 of 1% of the value of the fund's average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professionals) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $78,465 pursuant to the Shareholder Services Plan. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 August 31, 2001, the fund was charged $67,470 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 August 31, 2001, the fund was charged $14,839 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"). 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 in person meeting 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. Subject to the Company'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. NOTE 4--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001, amounted to $66,378,478 and $66,931,856, respectively. At August 31, 2001, accumulated net unrealized depreciation on investments was $3,220,454, consisting of $1,135,241 gross unrealized appreciation and $4,355,695 gross unrealized depreciation. At August 31, 2001, 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). REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Aggressive Growth Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Aggressive Growth Fund (one of the Series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, 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 August 31, 2001 and confirmation of securities not held by the custodian by correspondence with others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Aggressive Growth Fund at August 31, 2001, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund NOTES For More Information Dreyfus Aggressive Growth Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 256AR0801 ================================= Dreyfus Emerging Leaders Fund ANNUAL REPORT August 31, 2001 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 Chairman 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 Emerging Leaders Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Emerging Leaders Fund covers the 12-month period from September 1, 2000 through August 31, 2001. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio managers, Hilary Woods and Paul Kandel. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section of www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Hilary Woods and Paul Kandel, Portfolio Managers How did Dreyfus Emerging Leaders Fund perform relative to its benchmark? For the 12-month period ended August 31, 2001, Dreyfus Emerging Leaders Fund produced a total return of -9.80% .(1) This exceeded the performance of the fund' s benchmark, the Russell 2000 Index, which produced a -11.63% total return for the same period.(2) We attribute the fund's negative absolute performance to its investments in the technology, energy and consumer sectors. On the other hand, the fund outperformed its benchmark by successfully employing a disciplined, blended growth-and-value investment approach, which identified attractive investment opportunities, particularly within the health care, financial and transport industry groups. What is the fund's investment approach? The fund invests primarily in a diversified portfolio of small-cap companies with total market values of $2.0 billion or less at the time of purchase. To create that portfolio, we focus primarily on emerging leaders in their respective industries. The emerging leaders in which we invest offer products or services that we believe enhance their prospects for future earnings growth. Using fundamental research, we seek companies with strong positions in major product lines, sustained achievement records and strong financial conditions. We also base investment decisions on the expected impact of changes in a company's management or organizational structure. Our investment approach targets growth-oriented stocks (those of companies with earnings that are expected to grow faster than the overall market) , value-oriented stocks (those that appear underpriced according to a variety of financial measurements) and stocks that exhibit both growth and value characteristics. We typically sell a stock when the reasons for buying it no longer apply or when the company begins to show deteriorating fundamentals or poor relative performance. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors influenced the fund's performance? The slowing U.S. economy created a challenging investment climate for most equity markets during the period. However, the fund's benchmark, the Russell 2000 Index, while losing value, maintained a greater percentage of its value than most broad market indices, such as the S& P 500 Index and Dow Jones Industrial Average. Many of the small-cap stocks that make up the Russell 2000 offered investors greater prospects for growth at lower price/earnings ratios than did the majority of larger company stocks. Small-cap stocks also benefited from declining interest rates, which made it easier for small companies to gain cost-effective access to business capital. The fund held its ground better than its benchmark through good investment decisions and individual security selections in several industry groups. Health care stocks delivered the fund's best results by far. Rising stock prices among a variety of health care service providers, such as Beverly Enterprises, Lincare Holdings and Manor Care, boosted fund performance. At the same time, the fund benefited from our decision to de-emphasize biotechnology stocks, which generally declined during the period. Another particularly fruitful area of investment included financials, where the fund emphasized insurers and specialty finance groups rather than traditional banks. The fund also realized modest gains, relative to its benchmark, among transports. In all three top-performing industry groups, the fund benefited from mergers or acquisitions of various holdings: Jones Medical in the health care group, Bank United in financials and Newport News Shipbuilding in transports. Of course, not all of the fund's investments performed as well as the stocks mentioned above. Most technology stocks declined during the period, with the fund's holdings in the area falling even more steeply than those of the benchmark. Semiconductor manufacturing and equipment-related stocks, such as TranSwitch and PLX Technology, had the greatest negative impact on performance. The fund also lost ground compared to the benchmark in the energy and consumer groups. Energy stocks declined during the second half of the reporting period, when falling oil and gas prices hurt many energy exploration and production stocks. In the consumer industry group, falling advertising revenues hurt media companies, while retailers suffered from reduced levels of consumer confidence and spending. What is the fund's current strategy? As of the end of the reporting period, in light of weakening consumer spending and weak fundamentals of technology companies, the fund held a smaller percentage of consumer- and technology-related stocks than its benchmark. The fund also held a relatively small position in financial stocks, although we have actively sought investments in insurance where the valuations are becoming more attractive in the face of firming industry fundamentals. The fund holds relatively large positions in energy, where stock prices in good companies have declined to attractive levels; health care, where some companies remained insulated from the impact of the economic slowdown; and in materials and processing, where we believe industry fundamentals are likely to benefit from improvements in the global economy. We remain as strongly committed as ever to our blended growth-and-value approach to small-cap investing. September 17, 2001 (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 2000 INDEX IS AN UNMANAGED INDEX OF SMALL-CAP STOCK PERFORMANCE AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF THE 3,000 LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Emerging Leaders Fund and the Russell 2000 Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- FUND 9/29/95 (9.80)% 18.59% 23.12% ((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS EMERGING LEADERS FUND ON 9/29/95 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE RUSSELL 2000 INDEX ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF 3,000 OF THE LARGEST U.S. COMPANIES BY MARKET CAPITALIZATION AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--92.9% Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL SERVICES--2.3% Dendrite International 750,000 (a) 9,742,500 Valassis Communications 625,000 (a) 22,137,500 31,880,000 CONSUMER NON-DURABLES--5.2% Church & Dwight 935,000 25,469,400 Dial 1,000,000 16,850,000 Dreyer's Grand Ice Cream 600,000 17,952,000 Kenneth Cole Productions, Cl. A 593,000 (a) 11,071,310 71,342,710 CONSUMER SERVICES--4.7% Emmis Communications, Cl. A 670,000 (a) 16,066,600 Entercom Communications 400,000 (a) 16,732,000 Harte-Hanks 775,000 18,476,000 Station Casinos 985,500 (a) 13,057,875 64,332,475 ELECTRONIC TECHNOLOGY--10.3% Aeroflex 1,100,000 (a) 9,735,000 Alpha Industries 460,000 (a) 14,609,600 Centillium Communications 462,700 5,691,210 Elantec Semiconductor 625,000 (a) 23,750,000 Integrated Silicon Solution 1,375,000 (a,b) 20,803,750 Lattice Semiconductor 840,000 (a) 19,630,800 Plexus 635,000 (a) 22,110,700 TranSwitch 1,600,000 (a) 13,120,000 Veeco Instruments 450,000 (a) 13,158,000 142,609,060 ENERGY MINERALS--3.4% Arch Coal 700,000 12,740,000 Cabot Oil & Gas, Cl. A 627,500 14,030,900 Meridian Resources 2,670,000 (a,b) 14,952,000 Unit 525,000 (a) 4,819,500 46,542,400 FINANCE--17.4% AmeriCredit 500,000 (a) 23,080,000 Annuity and Life Re Holdings 800,000 27,784,000 Bank United (CPR) 525,000 (a) 162,750 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- FINANCE (CONTINUED) City National 445,000 20,710,300 Commerce Bancorp 375,000 25,331,250 First Midwest Bancorp 750,000 25,155,000 First Virginia Banks 435,000 19,988,250 Horace Mann Educators 950,000 19,190,000 Mercury General 495,000 19,453,500 Protective Life 725,000 21,626,750 RenaissanceRe Holdings 260,000 18,551,000 Westamerica Bancorporation 500,000 19,540,000 240,572,800 HEALTH SERVICES--6.3% Beverly Enterprises 1,900,000 (a) 19,000,000 DaVita 1,100,000 (a) 22,715,000 Humana 1,925,000 (a) 23,100,000 Manor Care 800,000 (a) 22,504,000 87,319,000 HEALTH TECHNOLOGY--4.4% Alpharma, Cl. A 600,000 18,840,000 CIMA Labs 300,000 (a) 16,059,000 CV Therapeutics 200,000 (a) 9,954,000 Cerus 100,000 (a) 5,382,000 ESC Medical Systems 350,000 (a) 10,136,000 60,371,000 INDUSTRIAL SERVICES--3.8% FMC Technologies 700,000 11,389,000 Granite Construction 750,000 18,187,500 Grant Prideco 785,000 (a) 8,211,100 Universal Compression Holdings 550,000 (a) 14,740,000 52,527,600 NON-ENERGY MINERALS--1.9% AK Steel Holding 1,500,000 19,530,000 Meridian Gold 675,000 (a) 6,513,750 26,043,750 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- PROCESS INDUSTRIES--8.4% Agrium 1,400,000 14,910,000 Albany International, Cl. A 300,000 (a) 6,330,000 Boise Cascade 600,000 22,020,000 Cytec Industries 570,000 (a) 18,821,400 Pactiv 1,955,500 (a) 31,053,340 Valspar 600,000 22,290,000 115,424,740 PRODUCER MANUFACTURING--5.3% IDEX 650,000 23,270,000 MagneTek 1,242,500 (a,b) 12,922,000 Power-One 950,000 (a) 10,364,500 Precision Castparts 400,000 13,736,000 Terex 320,000 (a) 7,091,200 Titan International 1,000,000 5,710,000 73,093,700 RETAIL TRADE--3.6% American Eagle Outfitters 840,000 (a) 21,630,000 MSC Industrial Direct 950,000 (a) 16,910,000 Pacific Sunwear of California 725,000 (a) 11,926,250 50,466,250 TECHNOLOGY SERVICES--9.4% Agile Software 970,000 (a) 9,700,000 Global Payments 600,000 21,330,000 LifePoint Hospitals 525,000 (a) 22,464,750 Midway Games 800,000 (a) 11,720,000 National Data 750,000 28,957,500 Netegrity 290,000 (a) 5,133,000 NetIQ 225,000 (a) 7,245,000 Network Associates 700,000 (a) 11,095,000 RSA Security 600,000 (a) 11,544,000 129,189,250 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION--4.2% Forward Air 700,000 (a) 19,593,000 SkyWest 700,000 22,288,000 Teekay Shipping 440,000 15,796,000 57,677,000 UTILITIES--2.3% National Fuel Gas 295,000 14,103,950 NorthWestern 300,000 6,645,000 OGE Energy 500,000 10,975,000 31,723,950 TOTAL COMMON STOCKS (cost $1,196,997,234) 1,281,115,685 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--7.3% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.33%, 11/1/2001 8,942,000 8,894,697 3.32%, 11/8/2001 46,436,000 46,160,635 3.26%, 11/15/2001 36,388,000 36,149,295 3.30%, 11/23/2001 6,434,000 6,386,903 3.27%, 11/29/2001 3,358,000 3,331,740 TOTAL SHORT-TERM INVESTMENTS (cost $100,892,754) 100,923,270 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $1,297,889,988) 100.2% 1,382,038,955 LIABILITIES, LESS CASH AND RECEIVABLES (.2%) (2,505,059) NET ASSETS 100.0% 1,379,533,896 (A) NON-INCOME PRODUCING. (B) INVESTMENTS IN NON-CONTROLLED AFFILIATES (COST $60,525,277)--SEE NOTE 1(C).
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 1,297,889,988 1,382,038,955 Cash 1,157,942 Receivable for shares of Common Stock subscribed 574,923 Dividends receivable 362,625 Prepaid expenses 29,441 1,384,163,886 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 1,415,174 Payable for shares of Common Stock redeemed 2,230,066 Payable for investment securities purchased 526,575 Accrued expenses 458,175 4,629,990 ------------------------------------------------------------------------------- NET ASSETS ($) 1,379,533,896 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 1,275,149,003 Accumulated net realized gain (loss) on investments 20,235,926 Accumulated net unrealized appreciation (depreciation) on investments--Note 4 84,148,967 ------------------------------------------------------------------------------- NET ASSETS ($) 1,379,533,896 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 38,254,777 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 36.06 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $26,263 foreign taxes withheld at source) 8,193,847 Interest 3,925,602 TOTAL INCOME 12,119,449 EXPENSES: Management fee--Note 3(a) 12,176,193 Shareholder servicing costs--Note 3(b) 4,865,092 Custodian fees--Note 3(b) 101,049 Registration fees 96,733 Prospectus and shareholders' reports 76,647 Professional fees 34,778 Directors' fees and expenses--Note 3(c) 33,665 Loan commitment fees--Note 2 15,407 Miscellaneous 24,158 TOTAL EXPENSES 17,423,722 INVESTMENT (LOSS) (5,304,273) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 20,947,735 Net unrealized appreciation (depreciation) on investments: Unaffiliated issuers (146,632,558) Affiliated issuers--Note 1(d) (7,829,463) NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS (154,462,021) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (133,514,286) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (138,818,559) SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, ---------------------------------- 2001 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (5,304,273) (3,132,525) Net realized gain (loss) on investments 20,947,735 19,844,723 Net unrealized appreciation (depreciation) on investments (154,462,021) 177,087,969 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (138,818,559) 193,800,167 ------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): NET REALIZED GAIN ON INVESTMENTS (20,356,093) (1,063,336) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 613,096,833 1,278,216,674 Dividends reinvested 18,909,171 958,679 Cost of shares redeemed (416,292,959) (507,540,709) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 215,713,045 771,634,644 TOTAL INCREASE (DECREASE) IN NET ASSETS 56,538,393 964,371,475 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 1,322,995,503 358,624,028 END OF PERIOD 1,379,533,896 1,322,995,503 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 16,319,178 34,153,129 Shares issued for dividends reinvested 511,119 28,600 Shares redeemed (11,156,422) (13,417,332) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,673,875 20,764,397 SEE NOTES TO FINANCIAL STATEMENTS. The Fund 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.
Year Ended August 31, --------------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 40.61 30.35 20.20 25.17 18.67 Investment Operations: Investment (loss)--net (.15)(a) (.14)(a) (.13)(a) (.16)(a) (.11) Net realized and unrealized gain (loss) on investments (3.81) 10.47 10.33 (2.14) 8.02 Total from Investment Operations (3.96) 10.33 10.20 (2.30) 7.91 Distributions: Dividends from net realized gain on investments (.59) (.07) (.05) (2.67) (1.41) Net asset value, end of period 36.06 40.61 30.35 20.20 25.17 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (9.80) 34.07 50.54 (10.82) 44.45 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.29 1.26 1.38 1.39 1.39 Ratio of net investment (loss) to average net assets (.39) (.37) (.49) (.63) (.62) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .09 Portfolio Turnover Rate 77.63 76.00 100.40 199.08 197.99 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 1,379,534 1,322,996 358,624 105,550 104,481 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Emerging Leaders 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 eleven series, including the fund. The fund's investment objective is capital growth. 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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to existing shareholders without a sales charge. 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 Board of Directors. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including 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 $23,430 during the period ended August 31, 2001 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. (C) AFFILIATED ISSUERS: Issuers in which the portfolio held 5% or more of the outstanding voting securities are defined as "affiliated" in the Act. The following summarizes transactions with affiliated issuers during the period ended August 31, 2001:
Shares ------------------------------------------------------------- Beginning End of Dividend Market Name of issuer of Period Purchases Sales Period Income($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- Integrated Silicon Solution 750,000 625,000 -- 1,375,000 -- 20,803,750 MagneTek -- 1,242,500 -- 1,242,500 -- 12,922,000 Meridian Resources -- 2,670,000 -- 2,670,000 -- 14,952,000 (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. (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 August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $5,304,273 and decreased paid-in capital by the same amount. Net assets were not affected by this reclassification. NOTE 2--Bank Line of Credit: The fund participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended August 31, 2001, the fund did not borrow under the Facility. 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 .90 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 professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $3,382,276 pursuant to the Shareholder Services Plan. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 August 31, 2001, the fund was charged $256,604 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 August 31, 2001, the fund was charged $101,049 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"). 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 in person meeting 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. Subject to the Company'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. (E) During the period ended August 31, 2001, the fund incurred total brokerage commissions of $2,344,740, of which $28,560 was paid to Dreyfus Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation. NOTE 4--Securities Transactions: The following summarizes the aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001: Purchases ($) Sales ($) ------------------------------------------------------------------------------- Unaffiliated issuers 1,145,967,468 995,742,667 Affiliated issuers 5,693,920 -- TOTAL 1,151,661,388 995,742,667 At August 31, 2001, accumulated net unrealized appreciation on investments was $84,148,967, consisting of $210,095,520 gross unrealized appreciation and $125,946,553 gross unrealized depreciation. At August 31, 2001, 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 REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Emerging Leaders Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Emerging Leaders Fund (one of the Series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, 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 August 31, 2001 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 Emerging Leaders Fund at August 31, 2001, 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 October 12, 2001 IMPORTANT TAX INFORMATION (Unaudited) For Federal tax purposes the fund hereby designates $.5850 per share as a long-term capital gain distribution paid on December 6, 2000. For More Information Dreyfus Emerging Leaders 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 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 259AR0801 ===================================== Dreyfus International Value Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 7 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 21 Report of Independent Auditors 22 Important Tax Information FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus International Value Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus International Value Fund covers the 12-month period from September 1, 2000 through August 31, 2001. 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, Sandor Cseh. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. However, Dreyfus portfolio managers have continued to find reasons for long-term optimism in the financial markets. For example, virtually all central banks around the globe have cut interest rates in 2001. A lower interest-rate environment is generally positive for global equity markets. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section of www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Sandor Cseh, Portfolio Manager How did Dreyfus International Value Fund perform relative to its benchmark? For the 12-month period ended August 31, 2001, Dreyfus International Value Fund produced a total return of -8.22%.(1) The fund's benchmark, the Morgan Stanley Capital International Europe, Australasia, Far East Index ("MSCI EAFE Index"), produced a total return of -24.35% for the same period.(2) We attribute the fund' s performance to an environment in which most of the world' s stock markets recorded negative returns because of concerns over a slowing economic outlook, particularly in the United States. However, we are pleased to report that the fund performed better than its benchmark due to two factors: limited exposure to telecommunications and technology stocks and the market's continued preference for value stocks over growth stocks. What is the fund's investment approach? The fund seeks long-term capital growth. To pursue this goal, the fund ordinarily invests most of its assets in stocks of foreign issuers that we consider to be value companies. The fund normally invests in companies in a broad range of countries and generally limits its investments in any single company to no more than 5% of its assets at the time of purchase. The fund' s investment approach is value oriented, research driven and risk averse. When selecting stocks, we attempt to identify potential investments through extensive quantitative and fundamental research. Emphasizing individual stock selection over economic or industry trends, the fund focuses on three key factors: *VALUE, or how a stock is priced relative to traditional business performance measures; *BUSINESS HEALTH, or overall efficiency and profitability as measured by return on assets and return on equity; and The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) *BUSINESS MOMENTUM, or the presence of the catalyst (such as corporate restructuring, management changes or positive earnings surprise) that can potentially trigger a price increase in the near- to midterm. The fund typically sells a stock when it is no longer considered a value company, appears less likely to benefit from the current market and economic environment, shows deteriorating fundamentals and declining momentum or falls short of our expectations. What other factors influenced the fund's performance? During the reporting period, the slowing U.S. economy set the stage for lackluster global stock markets' performance. International companies generally depend heavily on the U.S. for consumption of their goods and services. In addition, the strong U.S. dollar hampered fund performance; because the fund invests primarily in overseas stocks that are denominated in local currencies, those investments translated into fewer dollars when the dollar strengthened relative to local currencies. On a positive note, the fund performed much better than its benchmark, largely because of our focus on value stocks, which remained in favor throughout the reporting period. While prices of many growth stocks fell sharply, their earnings fell even faster. In comparison, value stocks began the reporting period at relatively low valuations and recorded relatively stable earnings throughout the period, making them more attractive to investors. We allocated the largest percentage of the fund's assets to Japan, taking special care to limit exposure to telecommunications and technology stocks. Instead, we concentrated on financial stocks, most notably consumer loan companies and credit card issuers. These companies benefited by offering financial services to individuals who would otherwise not have been able to obtain those services from the major Japanese banks. In Europe, the fund recorded its best returns in the United Kingdom, chiefly by avoiding telecommunications and technology stocks. Unilever, a U.K.-based food and household products company, was the fund' s top performing stock during the period. The company's global presence helped offset the negative effects of economic changes in any one country during the period. In France, a strong performer for the fund was BNP Paribas, one of the country' s largest financial institutions. Finally, the fund's emerging markets exposure is limited to a combined maximum of five percent of the fund's total assets. Even so, investments in the Philippines, South Korea, Brazil and Mexico all contributed positively to performance. What is the fund's current strategy? In our view, Japanese stocks currently rank among the most reasonably priced stocks in the world, especially telecommunications and technology stocks. However, we have not increased the fund's exposure there because of our concerns about the Japanese economy. In fact, we have not recently made any major shifts in our country allocations, which for the most part are very similar to those of the MSCI EAFE Index. September 17, 2001 (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. INVESTMENTS IN FOREIGN SECURITIES INVOLVE SPECIAL RISKS. PLEASE READ THE PROSPECTUS FOR FURTHER DISCUSSION OF THESE RISKS. (2) SOURCE: LIPPER INC. -- REFLECTS NET REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (MSCI EAFE) INDEX IS AN UNMANAGED INDEX COMPOSED OF A SAMPLE OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND PACIFIC BASIN COUNTRIES. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus International Value Fund and the Morgan Stanley Capital International Europe, Australasia, Far East (EAFE((reg.tm))) Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- FUND 9/29/95 (8.22)% 6.96% 6.97% ((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS INTERNATIONAL VALUE FUND ON 9/29/95 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST (EAFE((reg.tm))) INDEX (THE "INDEX") ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE INDEX IS AN UNMANAGED INDEX COMPOSED OF A SAMPLE OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF EUROPEAN AND PACIFIC BASIN COUNTRIES AND INCLUDES NET DIVIDENDS REINVESTED. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--94.3% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- AUSTRALIA--2.6% Goodman Fielder 1,855,637 1,221,136 National Australia Bank 259,901 4,579,258 Santos 835,420 2,834,827 8,635,221 BELGIUM--1.2% Dexia 255,640 4,074,458 Dexia (Strip VVPR) 182,980 (a) 1,668 4,076,126 BRAZIL--.7% Petroleo Brasileiro, ADR 54,815 1,173,589 Tele Norte Leste, ADR 2 22 Telecomunicacoes Brasileiras, ADR (PFD Block) 33,667 1,102,931 2,276,542 FINLAND--.9% Kesko, Cl. B 169,966 1,421,121 Sampo, Cl. A 165,300 1,401,701 2,822,822 FRANCE--7.7% Air France 99,695 1,648,052 Alstom 66,875 1,825,640 Assurances Generales de France 40,859 2,231,589 BNP Paribas 53,850 4,959,143 Bongrain 25,928 1,080,401 Compagnie de Saint-Gobain 13,586 2,093,524 Compagnie Generale des Etablissements Michelin, Cl. B 103,522 3,251,782 Societe Generale, Cl. A 16,480 973,715 TotalFinaElf, ADR 74,114 5,473,319 Usinor 139,263 1,558,045 25,095,210 GERMANY--7.6% Bayer 118,219 3,794,281 Bayerische Hypo- und Vereinsbank 39,371 1,634,099 Commerzbank 148,380 3,713,790 Deutsche Lufthansa 127,523 2,023,193 Deutsche Post 236,104 3,509,058 E.On 102,347 5,627,196 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- GERMANY (CONTINUED) MG Technologies 148,293 1,108,751 Merck KGaA 26,658 1,042,760 Volkswagen 56,039 2,483,283 24,936,411 GREECE--1.1% Hellenic Telecommunications Organization, ADR 456,978 3,710,661 HONG KONG--1.3% Hongkong Electric 564,356 2,145,332 Swire Pacific, Cl. A 407,000 1,977,653 4,122,985 INDIA--.3% Videsh Sanchar Nigam, ADR 74,401 847,427 IRELAND--1.3% Bank of Ireland 456,995 4,341,056 ITALY--5.3% Banca Popolare di Bergamo-Credito Varesino 153,561 2,682,444 ENI 414,885 5,517,769 Finmeccanica 3,391,630 (a) 2,897,662 Sanpaolo IMI 158,263 1,991,975 Telecom Italia 926,212 4,383,059 17,472,909 JAPAN--19.0% AIFUL 34,250 3,095,426 CANON 159,000 4,790,003 Credit Saison 241,500 5,588,631 FUJI MACHINE MANUFACTURING 96,400 1,301,990 HONDA MOTOR 82,000 2,960,239 KONAMI 46,300 1,461,060 LAWSON 52,400 1,825,523 MABUCHI MOTOR 42,300 3,812,286 MINEBEA 419,000 2,351,774 MURATA MANUFACTURING 11,500 687,087 Marubeni 1,458,000 (a) 2,220,709 Matsumotokiyoshi 83,000 3,401,439 NIPPON TELEGRAPH AND TELEPHONE 95 431,691 NISSAN MOTOR 460,000 2,686,414 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- JAPAN (CONTINUED) Nippon Express 875,000 3,850,928 Nishimatsu Construction 412,000 2,042,058 RINNAI 179,100 3,903,471 ROHM 15,000 1,654,816 SHOHKOH FUND & CO. 10,000 1,193,251 Seventy-Seven Bank 380,000 2,174,444 Shin-Etsu Chemical 80,000 2,477,385 Sumitomo Bakelite 226,000 1,306,534 TDK 35,000 1,826,061 Takeda Chemical Industries 76,000 3,127,361 Yamaha Motor 123,000 888,434 Yamanouchi Pharmaceutical 55,000 1,312,113 62,371,128 MEXICO--.3% Telefonos de Mexico, ADR 23,581 859,763 NETHERLANDS--7.9% ABN AMRO 259,507 4,793,890 Akzo Nobel 67,030 2,976,444 Buhrmann 130,917 1,092,237 Fortis 202,523 5,715,242 Hunter Douglas 96,584 2,505,457 Koninklijke (Royal) Philips Electronics, ADR 115,200 3,083,904 Stork 153,033 1,493,030 Vedior 197,790 2,443,674 Wolters Kluwer 86,800 1,859,890 25,963,768 NEW ZEALAND--.4% Telecom Corporation of New Zealand 606,794 1,347,377 NORWAY--.4% Statoil 204,760 1,437,042 PHILIPPINES--.2% Manila Electric, Cl. B 813,480 (a) 709,801 PORTUGAL--1.4% Electricidade de Portugal 800,690 2,080,697 Portugal Telecom 387,192 (a) 2,478,353 4,559,050 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- SINGAPORE--2.2% Creative Technology 165,200 1,181,180 DBS 670,000 5,274,378 Oversea-Chinese Banking 114,855 725,970 7,181,528 SOUTH KOREA--1.1% Korea Electric Power, ADR 179,994 1,787,340 Pohang Iron & Steel, ADR 108,560 1,890,030 3,677,370 SPAIN--4.5% Banco Popular Espanol 93,032 3,423,601 Endesa 356,284 5,928,690 Repsol YPF, ADR 317,758 5,373,288 14,725,579 SWEDEN--1.3% Autoliv 132,578 2,624,727 Investor, Cl. B 129,814 1,540,756 4,165,483 SWITZERLAND--6.6% Barry Callebaut 19,828 2,623,540 Clariant 108,920 2,004,542 Forbo 2,055 766,284 Givaudan 5,590 1,721,345 Novartis 82,400 3,015,601 Swisscom 10,154 2,925,222 UBS 110,580 5,413,611 Zurich Financial Services 11,110 3,150,517 21,620,662 TAIWAN--.4% Taiwan Semiconductor Manufacturing, ADR 105,560 (a) 1,370,169 COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- UNITED KINGDOM--18.6% Allied Domecq 669,700 3,949,629 BAE SYSTEMS 943,092 4,531,991 BOC 263,130 3,927,492 Barclays 169,785 5,167,335 Bunzl 782,350 5,177,928 Diageo 387,796 3,924,724 Enterprise Oil 467,780 4,018,969 Morgan Crucible 1,013,407 3,851,195 Rexam 974,555 5,037,972 Rio Tinto 183,652 3,316,182 Royal & Sun Alliance Insurance 883,247 6,160,823 Scottish & Southern Energy 320,214 3,096,203 Unilever 506,835 4,339,752 Wolseley 537,201 4,016,967 60,517,162 TOTAL COMMON STOCKS (cost $327,905,693) 308,843,252 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--3.1% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.31%, 11/8/2001 1,344,000 1,336,030 3.30%, 11/15/2001 6,447,000 6,404,707 3.28%, 11/29/2001 2,521,000 2,501,286 TOTAL SHORT-TERM INVESTMENTS (cost $10,238,764) 10,242,023 ---------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $338,144,457) 97.4% 319,085,275 CASH AND RECEIVABLES (NET) 2.6% 8,392,682 NET ASSETS 100.0% 327,477,957 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 338,144,457 319,085,275 Cash 3,449,710 Cash denominated in foreign currencies 5,009,700 5,139,772 Dividends receivable 971,841 Receivable for investment securities sold 720,287 Receivable for shares of Common Stock subscribed 209,711 Prepaid expenses 17,587 329,594,183 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 357,017 Payable for investment securities purchased 1,633,502 Payable for shares of Common Stock redeemed 24,858 Accrued expenses 100,849 2,116,226 ------------------------------------------------------------------------------- NET ASSETS ($) 327,477,957 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 346,459,707 Accumulated undistributed investment income--net 3,358,335 Accumulated net realized gain (loss) on investments and foreign currency transactions (3,410,968) Accumulated net unrealized appreciation (depreciation) on investments and foreign currency transactions--Note 4(b) (18,929,117) ------------------------------------------------------------------------------- NET ASSETS ($) 327,477,957 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 22,277,305 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 14.70 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $929,041 foreign taxes withheld at source) 7,270,575 Interest 484,275 TOTAL INCOME 7,754,850 EXPENSES: Management fee--Note 3(a) 3,473,060 Shareholder servicing costs--Note 3(b) 942,526 Custodian fees 280,454 Registration fees 63,929 Professional fees 26,822 Prospectus and shareholders' reports 17,257 Directors' fees and expenses--Note 3(c) 6,589 Loan commitment fees--Note 2 4,173 Miscellaneous 24,523 TOTAL EXPENSES 4,839,333 INVESTMENT INCOME--NET 2,915,517 ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments and foreign currency transactions (917,891) Net realized gain (loss) on forward currency exchange contracts (168,732) NET REALIZED GAIN (LOSS) (1,086,623) Net unrealized appreciation (depreciation) on investments and foreign currency transactions (30,690,585) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (31,777,208) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (28,861,691) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, ----------------------------------- 2001 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 2,915,517 2,995,045 Net realized gain (loss) on investments (1,086,623) 27,418,422 Net unrealized appreciation (depreciation) on investments (30,690,585) (16,443,316) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (28,861,691) 13,970,151 ------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net (2,532,413) (1,879,134) Net realized gain on investments (23,479,060) (13,055,032) TOTAL DIVIDENDS (26,011,473) (14,934,166) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 415,539,603 1,117,024,340 Dividends reinvested 18,390,242 11,642,447 Cost of shares redeemed (448,364,325) (991,584,573) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (14,434,480) 137,082,214 TOTAL INCREASE (DECREASE) IN NET ASSETS (69,307,644) 136,118,199 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 396,785,601 260,667,402 END OF PERIOD 327,477,957 396,785,601 Undistributed investment income--net 3,358,335 2,975,231 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 26,712,249 65,171,993 Shares issued for dividends reinvested 1,170,835 686,870 Shares redeemed (28,656,460) (57,686,451) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (773,376) 8,172,412 SEE NOTES TO FINANCIAL STATEMENTS. 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.
Year Ended August 31, ------------------------------------------------------------------ 2001 2000 1999 1998 1997 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 17.21 17.52 14.50 15.05 13.23 Investment Operations: Investment income--net .13(a) .15(a) .16(a) .13 .07 Net realized and unrealized gain (loss) on investments (1.47) .44 3.76 (.20) 1.98 Total from Investment Operations (1.34) .59 3.92 (.07) 2.05 Distributions: Dividends from investment income--net (.11) (.11) (.15) (.08) (.10) Dividends from net realized gain on investments (1.06) (.79) (.75) (.40) (.13) Total Distributions (1.17) (.90) (.90) (.48) (.23) Net asset value, end of period 14.70 17.21 17.52 14.50 15.05 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (8.22) 3.48 28.19 (.62) 15.72 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.39 1.40 1.40 1.44 1.49 Ratio of net investment income to average net assets .84 .88 1.00 1.17 1.09 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .03 Portfolio Turnover Rate 30.70 37.64 30.68 34.46 25.35 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 327,478 396,786 260,667 162,707 96,896 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus International 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 eleven series, including the fund. The fund's investment objective is long-term capital growth. The Dreyfus Corporation (the "Manager") serves as the fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, 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 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 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 amounts of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains 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 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, The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. (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 participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended August 31, 2001, the fund did not borrow under the Facility. 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 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 professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $868,265 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 August 31, 2001, the fund was charged $52,471 pursuant to the transfer agency agreement. (C) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). 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 in person meeting 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. Subject to the Company'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. 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 August 31, 2001, amounted to $102,514,113 and $138,034,643, respectively. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 and to settle foreign currency transactions. 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 August 31, 2001, the fund did not have any open forward currency exchange contracts. (B) At August 31, 2001, accumulated net unrealized depreciation on investments was $19,059,182, consisting of $25,438,062 gross unrealized appreciation and $44,497,244 gross unrealized depreciation. At August 31, 2001, 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). REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus International Value Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus International Value Fund (one of the Series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, 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 confirmation of securities owned as of August 31, 2001, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus International Value Fund at August 31, 2001, 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 October 12, 2001 The Fund IMPORTANT TAX INFORMATION (Unaudited) In accordance with Federal tax law, the fund elects to provide each shareholder with their portion of the fund's foreign taxes paid and the income sourced from foreign countries. Accordingly, the fund hereby makes the following designations regarding its fiscal year ended August 31, 2001: -- the total amount of taxes paid to foreign countries was $929,041 -- the total amount of income sourced from foreign countries was $4,949,397 As required by Federal tax law rules, shareholders will receive notification of their proportionate share of foreign taxes paid and foreign sourced income for the 2001 calendar year with form 1099-DIV which will be mailed by January 31, 2002. For Federal tax purposes the fund hereby designates $.7378 per share as a long-term capital gain distribution of the $1.1650 per share paid on December 11, 2000. NOTES For More Information Dreyfus International Value Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian The Bank of New York 100 Church Street New York, N.Y. 10286 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or d ownloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 254AR0801 =================================== Dreyfus Midcap Value Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 7 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 20 Report of Independent Auditors 21 Important Tax Information FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Midcap Value Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Midcap Value Fund covers the 12-month period from September 1, 2000 through August 31, 2001. Inside, you' ll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio managers, Peter Higgins and Brian Ferguson. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Peter Higgins and Brian Ferguson, Portfolio Managers How did Dreyfus Midcap Value Fund perform relative to its benchmark? For the 12-month period ended August 31, 2001, Dreyfus Midcap Value Fund produced a total return of 7.02%.(1) In comparison, the fund's benchmark, the Russell Midcap Value Index (the "Index"), produced a total return of 11.57% for the same period.(2) The fund's performance trailed that of the Index primarily because we allocated a higher percentage of total assets to technology stocks, which in our view reached attractive valuations but have not yet returned to favor among investors. Nonetheless, the fund did have a positive total return during a period that was quite challenging to the stock market in general. Returns from the fund' s retail, health care and energy holdings helped offset some of the losses incurred by its technology holdings. What is the fund's investment approach? The fund's goal is to surpass the performance of the Russell Midcap Value Index by investing in midcap companies that appear to us to be inexpensive relative to certain financial measurements of their intrinsic worth or business prospects When selecting stocks for the fund, we emphasize three key factors: VALUE, or how the stock is priced relative to its intrinsic worth based on a variety of traditional measures; BUSINESS HEALTH, as defined by the company's overall efficiency and profitability; and BUSINESS MOMENTUM, or the presence of a catalyst -- such as corporate restructuring, change in management or a spin-off -- that could trigger an increase in the stock's price in the near term The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) We typically sell a stock when we no longer consider it attractively valued, when it appears less likely to benefit from the current market and economic environment, when it shows deteriorating fundamentals or declining momentum or when its performance falls short of our expectations. What other factors influenced the fund's performance? The fund was significantly affected during the reporting period by its overweighted position in technology stocks, relative to the Index. Through intensive fundamental research, we identified what we believe are fundamentally sound, growing technology companies whose stocks were selling at attractively low prices compared to historical norms. For example, we scored successes during the period with several semiconductor capital equipment companies, as well as selected software companies, that rebounded from abnormally low valuations. Unfortunately, however, most technology stocks have not yet begun to recover from the severe declines experienced during the "tech wreck." In the wake of severe declines among technology stocks, and in the midst of an economic slowdown, most investors have not yet developed an appetite even for beaten-down but fundamentally sound technology stocks. On a more positive note, several other industry groups performed very well for the fund. For example, the retail sector posted strong returns through most of the period, because consumer spending remained strong even as the business sector of the economy slowed dramatically. We believe that the Federal Reserve Board' s (the "Fed") aggressive interest-rate reductions encouraged consumers to spend by making borrowing more affordable. The Fed cut interest rates seven times during the reporting period in an aggressive attempt to avert a recession and stimulate future economic growth. Health care stocks also produced attractive returns for the fund during the reporting period. We began increasing the fund's exposure to the health care group at the start of the reporting period based on ou belief that these stocks would hold up better than other areas in a slower economic environment. That' s because people need to take care of their health regardless of the economic environment, supporting health care companies' earnings even when the economy is weak. Finally, energy stocks also contributed positively to the fund's performance. Energy companies fared particularly well when oil and natural gas prices were high in late 2000 and early 2001, before giving back some of those gains later in the period when energy prices fell. What is the fund's current strategy? As of the end of the reporting period, the economy has continued to deteriorate. In response, we have increased the fund's exposure to traditionally defensive market sectors, such as health care and energy, which have historically tended to hold their value better during downturns than other areas of the market. At the same time, we have trimmed our exposure to several reinsurance companies, because we believe that pricing difficulties in a faltering economy could cause their stock prices to decline. However, we have continued to invest in a carefully selected group of technology stocks that we believe are fundamentally sound but whose stocks are currently selling at low prices. Should these stocks return to favor among investors, as we believe they eventually will, their prices will rise accordingly. However, there is no guarantee that this will happen, and the fund's composition is subject to change as market conditions evolve. September 17, 2001 (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 MIDCAP VALUE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE AND MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Midcap Value Fund and the Russell Midcap Value Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- FUND 9/29/95 7.02% 20.97% 22.26% ((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS MIDCAP VALUE FUND ON 9/29/95 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE RUSSELL MIDCAP VALUE INDEX (THE "INDEX") ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE INDEX IS AN UNMANAGED INDEX OF THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--99.0% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- BASIC INDUSTRIES--7.1% Agrium 441,800 4,705,170 Alcan 172,600 6,268,832 Arch Coal 377,600 6,872,320 CONSOL Energy 297,400 7,732,400 IMC Global 490,300 5,790,443 Jefferson Smurfit, ADR 479,500 10,716,825 Massey Energy 504,500 9,913,425 Phelps Dodge 333,100 13,124,140 PolyOne 365,300 3,689,530 Potash Corp. of Saskatchewan 115,500 7,256,865 USX-U. S. Steel 219,400 4,363,866 80,433,816 CAPITAL GOODS--7.3% Agilent Technologies 469,000 (a) 12,428,500 Corning 557,300 6,693,173 Deere & Co. 233,400 10,075,878 Eaton 36,600 2,632,638 Ingersoll-Rand 370,500 15,031,185 Kadant 8,445 (a) 116,963 NCR 582,700 (a) 22,055,195 Quanta Services 124,700 (a) 2,243,353 TRW 82,100 2,889,920 Thermo Electron 145,700 (a) 3,157,319 Xerox 561,800 5,168,560 82,492,684 CONSUMER DURABLES--.8% Autoliv 136,800 2,720,952 Masco 244,900 6,323,318 9,044,270 CONSUMER NON-DURABLES--4.6% Eastman Kodak 36,400 1,625,988 Jones Apparel Group 186,300 (a) 5,942,970 Loews 151,600 7,401,112 NIKE, Cl. B 202,900 10,145,000 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-DURABLES (CONTINUED) Reader's Digest Association, Cl. A 270,100 5,050,870 Tyson Foods, Cl. A 1,322,100 13,948,155 UST 249,100 8,220,300 52,334,395 CONSUMER SERVICES--13.3% Abercrombie & Fitch, Cl. A 160,300 (a) 4,863,502 Barnes & Noble 160,300 (a) 6,487,341 CVS 443,800 16,025,618 Cendant 711,800 (a) 13,574,026 Circuit City Stores-Circuit City Group 334,500 5,586,150 Federated Department Stores 278,400 (a) 10,108,704 Gap 615,500 12,094,575 Interpublic Group of Companies 475,700 12,881,956 Intimate Brands 392,400 5,399,424 McDonald's 350,600 10,528,518 Nextel Communications, Cl. A 716,500 (a) 8,655,320 Park Place Entertainment 882,900 (a) 9,385,227 Pittston Brink's 156,200 3,445,772 RadioShack 945,900 22,134,060 Rite Aid 344,700 (a) 2,736,918 Six Flags 422,200 (a) 7,021,186 150,928,297 ENERGY--14.7% Anadarko Petroleum 162,700 8,419,725 Baker Hughes 177,800 5,856,732 Burlington Resources 105,400 4,005,200 Cooper Cameron 126,700 (a) 5,479,775 Devon Energy 257,206 11,900,922 EOG Resources 124,100 3,924,042 El Paso 115,000 5,587,850 Global Marine 527,400 (a) 7,594,560 Grant Prideco 177,000 (a) 1,851,420 Halliburton 304,200 8,475,012 Noble Affiliates 254,900 8,602,875 Petroleum Geo-Services, ADR 999,300 (a) 9,953,028 COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) Rowan Cos. 61,100 (a) 950,105 Santa Fe International 498,200 12,604,460 Sunoco 538,900 20,386,587 Tidewater 360,200 11,204,340 Transocean Sedco Forex 423,400 12,236,260 Valero Energy 389,400 16,117,745 Varco International 190,200 (a) 2,887,236 Weatherford International 265,300 (a) 8,821,396 166,859,270 FINANCIAL SERVICES--11.0% ACE 158,600 5,260,762 Allstate 114,100 3,871,413 Aon 84,100 3,124,315 Bear Stearns Cos. 43,000 2,244,170 Chubb 33,700 2,274,750 Conseco 1,008,200 (a) 9,255,276 E*Trade Group 1,796,900 (a) 11,500,160 Everest Re 99,600 6,464,040 First Union 59,600 2,051,432 FleetBoston Financial 384,700 14,168,501 Franklin Resources 211,600 8,681,948 Hartford Financial Services 56,500 3,661,200 Knight Trading Group 1,205,800 (a) 12,540,320 Stilwell Financial 1,039,400 29,726,840 XL Capital, Cl. A 121,300 10,067,900 124,893,027 HEALTH CARE--9.6% Aetna 174,200 (a) 5,208,580 Bausch & Lomb 615,300 22,378,461 Boston Scientific 412,000 (a) 7,869,200 Guidant 827,900 (a) 29,897,045 ICN Pharmaceuticals 1,335,300 39,324,585 Oxford Health Plans 62,700 (a) 1,879,746 Quintiles Transnational 115,400 (a) 2,020,654 108,578,271 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- MISCELLANEOUS--.5% Symbol Technologies 382,400 5,162,400 TECHNOLOGY--22.7% Accenture, Cl. A 597,000 8,895,300 Advanced Micro Devices 299,500 (a) 4,054,549 Agere Systems, Cl. A 1,061,200 (a) 5,412,120 Apple Computer 817,700 (a) 15,168,335 Arrow Electronics 30,100 (a) 806,379 Ascential Software 2,092,050 (a) 9,874,476 Avaya 853,200 9,692,352 Avnet 132,100 3,180,968 BMC Software 574,300 (a) 9,188,800 Compaq Computer 295,700 3,651,895 Computer Sciences 207,700 (a) 7,809,520 Comverse Technology 211,400 (a) 5,314,596 Conexant Systems 2,572,800 (a) 30,642,048 DuPont Photomasks 215,600 (a) 7,546,000 Fairchild Semiconductor, Cl. A 166,100 (a) 3,582,777 Gateway 361,700 (a) 3,244,449 Global Crossing 207,400 (a) 874,627 i2 Technologies 490,500 (a) 3,266,730 Infineon Technologies, ADR 416,700 9,846,621 JDS Uniphase 487,300 (a) 3,435,465 KPMG Consulting 446,100 6,571,053 Keane 227,000 (a) 3,824,950 LSI Logic 230,600 (a) 4,669,650 Lexmark International 92,800 (a) 4,830,240 Macromedia 360,400 (a) 5,020,372 Motorola 436,700 7,598,580 Palm 1,412,000 (a) 5,054,960 Parametric Technology 1,306,000 (a) 9,520,740 Scientific-Atlanta 1,016,300 20,874,276 Silicon Graphics 704,500 (a) 309,980 Solectron 1,034,300 (a) 14,066,480 Symantec 189,300 (a) 8,138,007 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) Tellabs 339,900 (a) 4,527,468 Teradyne 261,100 (a) 8,558,858 3Com 2,330,900 (a) 9,586,057 258,639,678 TRANSPORTATION--3.1% AMR 387,400 (a) 12,392,926 Continental Airlines, Cl. B 120,800 (a) 5,248,452 Delta Air Lines 315,500 12,178,300 Norfolk Southern 314,600 5,857,852 35,677,530 UTILITIES--4.3% Aquila 341,840 (a) 8,904,932 Citizens Communications 574,300 (a) 6,173,725 Mirant 714,500 (a) 20,470,425 NRG Energy 213,000 (a) 3,919,200 PG&E 216,700 3,553,880 Wisconsin Energy 225,980 6,169,118 49,191,280 TOTAL COMMON STOCKS (cost $1,213,135,413) 1,124,234,918 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--.5% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.32%, 11/8/2001 3,351,000 3,331,128 3.27%, 11/29/2001 2,448,000 2,428,857 TOTAL SHORT-TERM INVESTMENTS (cost $5,758,219) 5,759,985 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $1,218,893,632) 99.5% 1,129,994,903 CASH AND RECEIVABLES (NET) .5% 6,246,795 NET ASSETS 100.0% 1,136,241,698 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 1,218,893,632 1,129,994,903 Cash 5,450,164 Receivable for investment securities sold 26,707,023 Receivable for shares of Common Stock subscribed 2,857,864 Dividends receivable 1,116,768 Prepaid expenses 91,856 1,166,218,578 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 1,050,053 Payable for investment securities purchased 25,872,373 Payable for shares of Common Stock redeemed 2,711,745 Accrued expenses 342,709 29,976,880 ------------------------------------------------------------------------------- NET ASSETS ($) 1,136,241,698 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 1,171,517,608 Accumulated net realized gain (loss) on investments 53,622,819 Accumulated net unrealized appreciation (depreciation) on investments--Note 4(b) (88,898,729) ------------------------------------------------------------------------------- NET ASSETS ($) 1,136,241,698 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 43,160,000 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 26.33 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $25,666 foreign taxes withheld at source) 5,545,473 Interest 461,815 TOTAL INCOME 6,007,288 EXPENSES: Management fee--Note 3(a) 4,754,055 Shareholder servicing costs--Note 3(b) 1,995,575 Registration fees 294,076 Custodian fees--Note 3(b) 128,068 Prospectus and shareholders' reports 40,968 Professional fees 32,260 Interest expense--Note 2 14,837 Directors' fees and expenses--Note 3(c) 13,087 Miscellaneous 10,774 TOTAL EXPENSES 7,283,700 INVESTMENT (LOSS) (1,276,412) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments: Long transactions 74,474,694 Short sale transactions 325,938 NET REALIZED GAIN (LOSS) 74,800,632 Net unrealized appreciation (depreciation) on investments (106,807,748) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (32,007,116) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (33,283,528) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, -------------------------------- 2001 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (1,276,412) (401,386) Net realized gain (loss) on investments 74,800,632 19,547,442 Net unrealized appreciation (depreciation) on investments (106,807,748) 15,980,664 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (33,283,528) 35,126,720 ------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): NET REALIZED GAIN ON INVESTMENTS (32,738,221) (4,867,590) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 1,367,378,810 190,777,681 Dividends reinvested 31,275,211 4,649,363 Cost of shares redeemed (385,434,926) (134,809,876) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 1,013,219,095 60,617,168 TOTAL INCREASE (DECREASE) IN NET ASSETS 947,197,346 90,876,298 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 189,044,352 98,168,054 END OF PERIOD 1,136,241,698 189,044,352 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 49,280,991 7,858,196 Shares issued for dividends reinvested 1,359,201 233,168 Shares redeemed (14,205,633) (5,889,376) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 36,434,559 2,201,988 SEE NOTES TO FINANCIAL STATEMENTS. 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.
Year Ended August 31, ------------------------------------------------------------------ 2001 2000 1999 1998 1997 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 28.11 21.70 15.39 22.23 15.80 Investment Operations: Investment (loss)--net (.06)(a) (.09)(a) (.17)(a) (.06)(a) (.01) Net realized and unrealized gain (loss) on investments 1.56 7.74 8.26 (5.73) 8.23 Total from Investment Operations 1.50 7.65 8.09 (5.79) 8.22 Distributions: Dividends from investment income--net -- -- -- -- (.04) Dividends from net realized gain on investments (3.28) (1.24) (1.78) (1.05) (1.75) Total Distributions (3.28) (1.24) (1.78) (1.05) (1.79) Net asset value, end of period 26.33 28.11 21.70 15.39 22.23 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) 7.02 37.60 55.71 (27.32) 55.45 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 1.15 1.27 1.34 1.29 1.25 Ratio of interest expense to average net assets .00(b) .04 .06 .01 .01 Ratio of net investment (loss) to average net assets (.20) (.38) (.89) (.25) (.14) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .26 Portfolio Turnover Rate 191.89 242.27 257.23 168.72 154.92 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 1,136,242 189,044 98,168 80,300 81,494 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Midcap 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 eleven series, including the fund. The fund's investment objective is to surpass the performance of the Russell Midcap Value Index. 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. Dreyfus Service Corporation (the " Distributor"), a wholly-owned subsidiary of the Manager, 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 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 Board of Directors. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss fro securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including amortization of discount and premium on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund received net earnings credits of $7,373 based on available cash balances left on deposit. Interest earned under this arrangement is included in interest income. (C) 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. (D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $1,276,412 and increase paid-in capital by $401,386 and decreased accumulated net realized gain (loss) on investments by $1,677,798. 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 based on prevailing market rates effect at the time of borrowings. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) The average daily amount of borrowings outstanding under both arrangements during the period ended August 31, 2001 was approximately $191,800 with a related weighted average annualized interest rate of 7.74%. 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 professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $1,584,685 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 August 31, 2001, the fund was charged $176,412 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 August 31, 2001, the fund was charged $128,068 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"). 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 in person meeting and $500 for telephone meetings. These fees are allocated among the funds in the Fund Group. The Chairman of the Board receives an additional 25% of such compensation. Subject to the Company's Emeritus Program Guidelines, Emeritus Board members, if any, receive 50% of the annual retainer fee and per meeting fee paid at the time the Board member achieved emeritus status. (D) A 1% redemption fee is charged and retained by the fund on shares redeemed within thirty days following the date of issuance, including redemptions made through the use of the fund's exchange privilege. NOTE 4--Securities Transactions: (A) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities, during the period ended August 31, 2001: Purchases ($) Sales ($) -------------------------------------------------------------------------------- Long transactions 2,168,787,751 1,201,627,587 Short sale transactions 1,374,500 1,700,438 TOTAL 2,170,162,251 1,203,328,025 The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value. The fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the portfolio replaces the borrowed security. The fund would realize a gain if the price of the security declines between those dates. Until the fund replaces the borrowed security, the fund will maintain daily a segregated account with a broker or custodian of permissable liquid assets sufficient to cover its short position. At August 31, 2001, there were no securities sold short outstanding. (B) At August 31, 2001, accumulated net unrealized depreciation on investments was $88,898,729, consisting of $39,832,323, gross unrealized appreciation and $128,731,052 gross unrealized depreciation. At August 31, 2001, 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 REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Midcap Value Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Midcap Value Fund (one of the series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, 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 as of August 31, 2001 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 Midcap Value Fund at August 31, 2001, 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 October 12, 2001 IMPORTANT TAX INFORMATION (Unaudited) For Federal tax purposes the fund hereby designates $.3676 per share as a long-term capital gain distribution of the $3.2800 per share paid on December 4, 2000. The fund also designates 4.829% of the ordinary dividends paid during the fiscal year ended August 31, 2001 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2002 of the percentage applicable to the preparation of their 2001 income tax returns. The Fund For More Information Dreyfus Midcap 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 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 258AR0801 ===================================== Dreyfus Mid Cap Value Plus Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Statement of Investments 9 Statement of Assets and Liabilities 10 Statement of Operations 11 Statement of Changes in Net Assets 12 Financial Highlights 13 Notes to Financial Statements 17 Report of Independent Auditors FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Mid Cap Value Plus Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Mid Cap Value Plus Fund covers the period from the fund's inception on June 29, 2001 through August 31, 2001. 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, Brian Ferguson. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Brian Ferguson, Portfolio Manager How did Dreyfus Mid Cap Value Plus Fund perform relative to its benchmark? From its inception on June 29, 2001 to the end of the annual reporting period on August 31, 2001, the fund produced a total return of -5.84%.(1) By comparison, the Russell Midcap Value Index, the fund's benchmark, produced a total return of -2.22% for the same period.(2) We believe that two months is too brief a time to assess the performance of any long-term investment. With that said, however, market conditions generally weakened during the reporting period because of a slowing economy. What is the fund's investment approach? The fund's goal is to exceed the performance of the Russell Midcap Value Index. To pursue this goal, the fund invests primarily in the common stocks of companies whose market values generally range between $2.5 billion and $35 billion at the time of purchase. However, because the fund may continue to hold a security as its market capitalization grows, a substantial portion of the fund' s holdings may have market capitalizations in excess of $35 billion at any given time. When selecting stocks for the fund, we utilize a "bottom-up" approach, where the focus is on individual stock selection rather than attempting to forecast market trends. The fund' s investment approach is value oriented, research driven and risk averse. When selecting stocks, we identify potential investments through extensive quantitative and fundamental research and by focusing on three key factors: * VALUE, or how a stock is priced relative to traditional business performance measures; * BUSINESS HEALTH, or overall efficiency and profitability as measured by return on assets and return on equity; and The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) *BUSINESS MOMENTUM, or the presence of a catalyst (such as corporate restructuring or changes in management) that may potentially trigger a price increase in the near to midterm. The fund typically sells a stock when it is no longer considered a value company, appears less likely to benefit from the current market and economic environment, shows deteriorating fundamentals or declining momentum or falls short of our expectations. What other factors influenced the fund's performance? During the brief reporting period, the market's preference for value stocks over growth stocks was the most significant factor influencing performance. Because we employ a generally value-oriented approach, this trend helped the fund avoid the brunt of the market's declines. In fact, in the late 1990s, value stocks languished as growth stocks dominated the stock market. Over time, growth stock prices rose to historically high levels relative to earnings, sales and other measures. When technology stocks fell abruptly out of favor in mid-2000, however, market leadership shifted to stocks with lower earnings growth rates and more reasonable valuations, which are the types of stocks in which the fund invests. The fund's performance was also affected by its above-average exposure to technology stocks. Although most technology companies are traditionally considered growth stocks, our research has uncovered a number of growing technology companies whose low stock prices put them firmly within the value category. In our view, these fundamentally sound businesses were unfairly punished along with more speculative stocks, creating opportunities to acquire shares of growing technology companies at what we believe are bargain prices Health care stocks have also performed well during the short time since the fund' s inception. The fund began operations with a relatively large exposure to health care stocks, primarily because they have historically performed well during periods of slowing economic growth. People need to take care of their health and medical needs regardless of the economic environment, supporting health care companies' revenues even during downturns. Finally, the fund's energy holdings performed relatively well, contributing modestly to the fund' s overall returns. We have invested primarily in energy services companies, many of which were selling at compelling valuations, in our opinion. What is the fund's current strategy? As of August 31, 2001, we have reduced the fund's exposure to capital goods stocks, locking in profits when they reached our valuation targets. We have also trimmed our exposure to reinsurance stocks based on current valuations On the other hand, we believe that we' ve found a number of attractive opportunities in the retail area, where valuations are near historic lows and the industry is suffering from a slowdown in consumer spending. As the economy recovers and consumers gain confidence, we believe that retailers could be among the first to benefit. Of course, there is no guarantee that they will do so, and the fund's composition is subject to change as market conditions evolve. September 17, 2001 (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. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH AUGUST 31, 2002, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL MIDCAP VALUE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE AND MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. The Fund STATEMENT OF INVESTMENTS August 31, 2001 STATEMENT OF INVESTMENTS
COMMON STOCKS--96.6% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- BASIC INDUSTRIES--5.4% Alcan 630 22,882 CONSOL Energy 1,040 27,040 Jefferson Smurfit, ADR 940 21,009 Phelps Dodge 420 16,548 Potash Corp. of Saskatchewan 380 23,875 111,354 CAPITAL GOODS--6.0% Deere & Co. 730 31,514 Eaton 160 11,509 Ingersoll-Rand 520 21,096 Kadant 24 (a) 332 NCR 1,040 (a) 39,364 TRW 300 10,560 Thermo Electron 420 (a) 9,101 123,476 CONSUMER DURABLES--1.1% Masco 860 22,205 CONSUMER NON-DURABLES--5.8% Eastman Kodak 160 7,147 Loews 490 23,922 NIKE, Cl. B 740 37,000 Tyson Foods, Cl. A 2,210 23,316 UST 840 27,720 119,105 CONSUMER SERVICES--13.4% Abercrombie & Fitch, Cl. A 600 (a) 18,204 Barnes & Noble 570 (a) 23,068 CVS 670 24,194 Cendant 1,290 (a) 24,600 Circuit City Stores-Circuit City Group 1,160 19,372 Federated Department Stores 420 (a) 15,250 Gap 1,770 34,781 Interpublic Group of Companies 850 23,018 McDonald's 1,160 34,835 Nextel Communications, Cl. A 470 (a) 5,678 Park Place Entertainment 940 (a) 9,992 RadioShack 1,820 42,588 275,580 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ ENERGY--12.3% Anadarko Petroleum 420 21,735 Baker Hughes 630 20,752 Burlington Resources 380 14,440 Cooper Cameron 450 (a) 19,463 EOG Resources 420 13,280 El Paso 420 20,408 Global Marine 1,270 (a) 18,288 Halliburton 1,040 28,974 Santa Fe International 1,360 34,408 Sunoco 950 35,938 Transocean Sedco Forex 520 15,028 Valero Energy 250 10,375 253,089 FINANCIAL SERVICES--15.3% ACE 520 17,248 Allstate 410 13,911 Aon 280 10,402 Bear Stearns Cos. 150 7,829 Chubb 110 7,425 Conseco 1,430 (a) 13,127 E*Trade Group 2,770 (a) 17,728 Everest Re 300 19,470 First Union 280 9,638 FleetBoston Financial 1,250 46,038 Franklin Resources 730 29,952 Hartford Financial Services 200 12,960 Knight Trading Group 2,090 (a) 21,736 Stilwell Financial 1,820 52,052 XL Capital, Cl. A 420 34,860 314,376 HEALTH CARE--8.8% Aetna 660 (a) 19,734 Bausch & Lomb 840 30,551 Guidant 1,400 (a) 50,568 ICN Pharmaceuticals 2,710 79,809 180,662 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY--19.7% Accenture, Cl. A 560 8,344 Agere Systems, Cl. A 4,240 (a) 21,624 Apple Computer 2,110 (a) 39,141 Ascential Software 6,000 (a) 28,320 Avaya 1,980 22,493 BMC Software 1,980 (a) 31,680 Compaq Computer 1,020 12,597 Computer Sciences 210 (a) 7,896 Conexant Systems 4,670 (a) 55,620 Gateway 1,270 (a) 11,392 Infineon Technologies, ADR 490 11,579 Lexmark International 360 (a) 18,738 Motorola 1,560 27,144 Parametric Technology 2,070 (a) 15,090 Scientific-Atlanta 1,540 31,632 Solectron 1,610 (a) 21,896 Teradyne 940 (a) 30,813 3COM 2,450 (a) 10,069 406,068 TRANSPORTATION--3.3% AMR 520 (a) 16,635 Continental Airlines, Cl. B 410 (a) 17,884 Delta Air Lines 300 11,580 Norfolk Southern 1,110 20,668 66,767 UTILITIES--5.5% Aquila 1,180 (a) 30,739 Mirant 1,340 (a) 38,391 NRG Energy 730 (a) 13,432 PG&E 600 9,840 Wisconsin Energy 870 20,967 113,369 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $2,118,471) 96.6% 1,986,051 CASH AND RECEIVABLES (NET) 3.4% 70,895 NET ASSETS 100.0% 2,056,946 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 2,118,471 1,986,051 Cash 63,251 Receivable for investment securities sold 33,892 Dividends receivable 2,318 Prepaid expenses 15,822 Due from The Dreyfus Corporation and affliliates 7,981 2,109,315 -------------------------------------------------------------------------------- LIABILITIES ($): Payable for investment securities purchased 34,292 Accrued expenses 18,077 52,369 -------------------------------------------------------------------------------- NET ASSETS ($) 2,056,946 -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 2,174,109 Accumulated undistributed investment income--net 2,177 Accumulated net realized gain (loss) on investments 13,080 Accumulated net unrealized appreciation (depreciation) on investments--Note 3 (132,420) -------------------------------------------------------------------------------- NET ASSETS ($) 2,056,946 -------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 174,809 NET ASSET VALUE, offering and redemption price per share--Note 2(d) ($) 11.77 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS From June 29, 2001 (commencement of operations) to August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $14 foreign taxes withheld at source) 3,398 Interest 1,398 TOTAL INCOME 4,796 EXPENSES: Investment advisory fee--Note 2(a) 2,628 Auditing fees 15,227 Registration fees 3,181 Custodian fees--Note 2(b) 1,539 Shareholder servicing costs--Note 2(b) 945 Prospectus and shareholders' reports 826 Legal fees 500 Directors' fees and expenses--Note 2(c) 114 Miscellaneous 217 TOTAL EXPENSES 25,177 Less--expense reimbursement from The Dreyfus Corporation due to undertaking--Note 2(a) (19,921) NET EXPENSES 5,256 INVESTMENT (LOSS) (460) -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($): Net realized gain (loss) on investments 13,080 Net unrealized appreciation (depreciation) on investments (132,420) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (119,340) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (119,800) SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS From June 29, 2001 (commencement of operations) to August 31, 2001 -------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (460) Net realized gain (loss) on investments 13,080 Net unrealized appreciation (depreciation) on investments (132,420) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (119,800) -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): NET PROCEEDS FROM SHARES SOLD 2,176,746 TOTAL INCREASE (DECREASE) IN NET ASSETS 2,056,946 -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period -- END OF PERIOD 2,056,946 Undistributed investment income--net 2,177 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): SHARES SOLD 174,809 SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following table describes the performance for the fiscal period from June 29, 2001 (commencement of operations) to August 31, 2001. Total return shows how much your investment in the fund would have increased (or decreased) during the period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. -------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 12.50 Investment Operations: Investment (loss) (.00)(a,b) Net realized and unrealized gain (loss) on investments (.73) Total from Investment Operations (.73) Net asset value, end of period 11.77 -------------------------------------------------------------------------------- TOTAL RETURN (%) (5.84)(c) -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .26(c) Ratio of investment (loss) to average net assets (.02)(c) Decrease reflected in above expense ratio due to undertaking by The Dreyfus Corporation 1.00(c) Portfolio Turnover Rate 35.82(c) -------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 2,057 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. C NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Mid Cap Value Plus 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 eleven series, including the fund, which commenced operations on June 29, 2001. The fund's investment objective is to exceed the performance of the Russell Midcap Value Index. The Dreyfus Corporation ("Dreyfus") serves as the fund' s investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. (" Mellon"), which is a wholly-owned subsidiary of Mellon Financial Corporation. The Boston Company Asset Management, LLC ("TBCAM"), an affiliate of Dreyfus, serves as the fund's sub-investment adviser. Dreyfus Service Corporation (the " Distributor"), a wholly-owned subsidiary of Dreyfus, 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 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. As of August 31, 2001, MBC Investments Corp., an indirect subsidiary of Mellon Financial Corporation, held 160,000 shares of the fund. 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 The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including amortization of discount and premium on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund received net earnings credits of $127 based on available cash balances left on deposit. Interest earned under this arrangement is included in interest income. (C) 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. (D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $2,637 and decreased paid-in capital by the same amount. Net assets were not affected by this reclassification. NOTE 2--Investment Advisory Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates: (A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory 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. Dreyfus has undertaken, from June 29, 2001 through August 31, 2002, to reduce the investment advisory fee paid by the fund, to the extent that the fund's aggregate expenses, exclusive of taxes, brokerage fees, shareholder service plan fees and extraordinary expenses, exceed an annual rate of 1.25% of the value of the fund's average daily net assets. The expense reimbursement, pursuant to the undertaking, amounted to $19,921 during the period ended August 31, 2001. Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and TBCAM, the sub-investment advisory fee is payable monthly by Dreyfus, and is based upon the value of the fund's average daily net assets, computed at the following annual rates: AVERAGE NET ASSETS 0 to $100 million. . . . . . . . . . . . . . . . . .25 of 1% In excess of $100 million to $1 billion. . . . . . .20 of 1% In excess of $1 billion to $1.5 billion. . . . . . .16 of 1% In excess of $1.5 billion. . . . . . . . . . . . . .10 of 1% (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 August 31, 2001, the fund was charged $876 pursuant to the Shareholder Services Plan. The fund compensates Dreyfus Transfer, Inc., a wholly owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended August 31, 2001, the fund was charged $18 pursuant to the transfer agency agreement. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) The fund compensates Mellon under a custody agreement for providing custodial services for the fund. During the period ended August 31, 2001, the fund was charged $1,539 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"). 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 in person meeting 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. Subject to the Company'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. NOTE 3--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001, amounted to $2,576,741 and $471,638, respectively. At August 31, 2001, accumulated net unrealized depreciation on investments was $132,420, consisting of $58,908, gross unrealized appreciation and $191,328 gross unrealized depreciation. At August 31, 2001, 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). REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Mid Cap Value Plus Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Mid Cap Value Plus Fund (one of the Series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, and the related statements of operations and changes in net assets and financial highlights for the period from June 29, 2001 (commencement of operations) to August 31, 2001. 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 audit. We conducted our audit 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 August 31, 2001 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 audit provides 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 Mid Cap Value Plus Fund at August 31, 2001, and the results of its operations, the changes in its net assets and the financial highlights for the period from June 29, 2001 to August 31, 2001, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund For More Information Dreyfus Mid Cap Value Plus Fund 200 Park Avenue New York, NY 10166 Investment Adviser The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Sub-Investment Adviser The Boston Company Asset Management, LLC One Boston Place Boston, MA 02108 Custodian Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 017AR0801 ==================================== Dreyfus Large Company Value Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 7 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 21 Report of Independent Auditors 22 Important Tax Information FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Large Company Value Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Large Company Value Fund covers the 10-month period from November 1, 2000 through August 31, 2001. 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, Douglas D. Ramos, CFA It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Douglas D. Ramos, CFA, Portfolio Manager How did Dreyfus Large Company Value Fund perform relative to its benchmark? For the 10-month period between the end of the fund's previous fiscal year-end on October 31, 2000 and the end of its current fiscal year on August 31, 2001, the fund produced a total return of -7.29% .(1) In comparison, the fund's benchmark, the Russell 1000 Value Index (the "Index"), achieved a total return of -4.36% for the same period.(2) The fund's results include performance under the guidance of the prior manager and the current manager, the latter of whom assumed management of the fund in July 2001. We attribute the fund's overall performance to a difficult market environment for equities. Slowing U.S. economic conditions drove the Index slightly lower during the period. The fund produced somewhat weaker results than the Index because of the disappointing performance of a small number of individual holdings in the financial, capital goods and energy industry groups. What is the fund's investment approach? The fund invests primarily in a diversified portfolio of companies with total market values of $5 billion or more at the time of purchase. To create that portfolio, we focus on a broad universe of stocks, looking for what we believe are attractive individual investment opportunities. While our investment approach emphasizes value-oriented stocks (those that appear underpriced according a variety of financial measurements) , we also evaluate growth characteristics and frequently purchase stocks that exhibit both growth and value characteristics. Our stock selection process relies on fundamental, bottom-up research into the underlying business and financial characteristics of each company in our investment universe. By examining a variety of factors, such as financial stability, competitive position and the impact of management The Fun DISCUSSION OF FUND PERFORMANCE (CONTINUED) or organizational change, we seek to identify investment candidates we believe are well positioned to prosper. We invest when a candidate's stock appears reasonably priced in relation to the company's prospects. We typically sell a stock when the reasons for buying it no longer apply or when the company begins to show deteriorating fundamentals. What other factors influenced the fund's performance? Weakness in the U.S. economy undermined many areas of the stock market during the reporting period. However, many investors sought shelter from uncertainty in value-oriented stocks, which declined far less on average than did growth-oriented stocks. This trend worked in the fund's favor during the period, especially in the basic materials and health care areas, both of which produced positive returns. However, in the financial and capital goods areas, performance was undermined by declines in several significant holdings, such as American Express, Bank of New York and Tyco International. Some of the fund' s energy-related holdings were also hurt by declines in energy prices during the second half of the reporting period. What is the fund's current strategy? Since late July 2001, when we stepped in as the fund's manager, we have sought ways to add value to the fund by actively managing its assets. Our approach has added flexibility to the fund's management style in several key areas where we believe Dreyfus' superb fundamental research capabilities can help the fund outperform the Index. Accordingly, we have begun reviewing the fund's portfolio, eliminating holdings not judged to be fundamentally attractive and maintaining or adding to those that meet our investment criteria. We believe that the best way to select good stocks for the long term is to carefully examine the financial and business fundamentals of each company in our investment universe. We do not favor limiting the fund to holding stocks in only the largest companies or to maintaining the same proportion of each industry as the Index. Rather, we believe in selecting the strongest prospects from among all possible investment candidates. While we intend to maintain a diversified portfolio of approximately 100 to 125 holdings in a wide range of industries, we expect that our investment approach may lead us to significantly emphasize one industry group or another, depending on which groups offer the greatest number of attractive investment opportunities. At the same time, we remain committed to the principle of blending growth and value disciplines to construct a portfolio that performs well in a wide range of market cycles and economic environments September 17, 2001 (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 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 FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Large Company Value Fund and the Russell 1000 Value Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- FUND 12/29/93 (6.96)% 9.55% 12.87% ((+)) 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 $10,000 INVESTMENT MADE ON THAT DATE IN THE RUSSELL 1000 VALUE INDEX (THE "INDEX"). FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 12/31/93 IS USED AS THE BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE INDEX IS AN UNMANAGED INDEX WHICH MEASURES THE PERFORMANCE OF THOSE RUSSELL 1000 COMPANIES WITH LOWER-PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--98.5% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- BANKING--6.9% Bank of America 31,000 1,906,500 Bank of New York 22,000 873,400 FleetBoston Financial 23,300 858,139 PNC Financial Services Group 4,100 273,019 Wells Fargo 44,600 2,052,046 5,963,104 COMMERCIAL SERVICES--.7% McGraw-Hill Cos. 2,900 171,825 Henry Schein 11,000 (a) 399,520 571,345 CONSUMER DURABLES--2.5% Ford Motor 29,400 584,178 General Motors 21,725 1,189,444 Newell Rubbermaid 17,900 409,910 2,183,532 CONSUMER NON-DURABLES--8.1% Coca-Cola 8,700 423,429 Gillette 16,700 511,855 Jones Apparel Group 11,500 (a) 366,850 Kimberly-Clark 8,300 515,015 Kraft Foods 20,100 648,225 Liz Claiborne 11,400 597,930 PepsiCo 6,800 319,600 Philip Morris Cos. 31,200 1,478,880 Procter & Gamble 23,300 1,727,695 UST 11,500 379,500 6,968,979 CONSUMER SERVICES--3.9% Carnival 22,000 688,160 Clear Channel Communications 5,100 (a) 256,377 Comcast, Cl. A 13,100 (a) 479,853 Disney (Walt) 29,500 750,185 McDonald's 21,100 633,633 Viacom, Cl. B 12,000 (a) 508,800 3,317,008 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONIC TECHNOLOGY--5.2% Boeing 21,000 1,075,200 Compaq Computer 20,100 248,235 General Dynamics 2,400 189,504 Hewlett-Packard 25,200 584,892 International Business Machines 9,300 930,000 Micron Technology 22,600 (a) 849,986 Motorola 17,600 306,240 Raytheon 10,000 262,900 4,446,957 ENERGY MINERALS--8.2% Anadarko Petroleum 8,600 445,050 Conoco, Cl. B 29,085 861,498 Exxon Mobil 112,442 4,514,546 Ocean Energy 56,400 1,063,140 Santa Fe International 7,800 197,340 7,081,574 FINANCE--23.6% Allstate 30,800 1,045,044 American Express 25,400 925,068 American International Group 34,129 2,668,927 Bank One 29,800 1,033,762 Citigroup 93,207 4,264,220 Countrywide Credit 11,700 485,550 Fannie Mae 8,200 624,922 Fifth Third Bancorp 6,200 361,460 Freddie Mac 18,700 1,175,856 GreenPoint Financial 39,700 1,564,974 Household International 7,000 413,700 J.P. Morgan Chase & Co. 28,800 1,134,720 KeyCorp 9,100 228,410 MBNA 25,200 875,952 Morgan Stanley Dean Witter & Co. 27,400 1,461,790 Synovus Financial 10,600 326,480 USA Education 10,200 807,942 Washington Mutual 25,200 943,488 20,342,265 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- HEALTH SERVICES--3.4% HCA 22,400 1,024,576 HEALTHSOUTH 36,000 (a) 650,880 Humana 22,000 (a) 264,000 Oxford Health Plans 16,200 (a) 485,676 Wellpoint Health Networks 5,000 (a) 532,400 2,957,532 HEALTH TECHNOLOGY--5.7% Abbott Laboratories 20,800 1,033,760 American Home Products 6,600 369,600 Baxter International 8,800 454,080 Bristol-Myers Squibb 9,200 516,488 Johnson & Johnson 11,278 594,463 King Pharmaceuticals 11,200 (a) 484,400 Merck & Co. 22,500 1,464,750 Zimmer Holdings 920 (a) 25,024 4,942,565 INDUSTRIAL SERVICES--1.6% BJ Services 13,800 (a) 309,534 ENSCO International 5,500 100,320 Waste Management 30,000 927,900 1,337,754 NON-ENERGY MINERALS--1.3% Alcoa 23,200 884,384 Weyerhaeuser 4,500 255,375 1,139,759 PROCESS INDUSTRIES--4.1% Boise Cascade 13,300 488,110 Dow Chemical 26,430 926,636 du Pont (EI) de Nemours 13,800 565,386 International Paper 14,500 581,740 Monsanto 27,100 924,381 3,486,253 PRODUCER MANUFACTURING--3.2% Deere & Co. 5,400 233,118 Emerson Electric 6,000 321,600 Georgia-Pacific Group 13,600 496,944 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- PRODUCER MANUFACTURING (CONTINUED) Honeywell International 21,000 782,460 Minnesota Mining & Manufacturing 8,400 874,440 2,708,562 RETAIL--3.8% Costco Wholesale 11,900 (a) 445,179 May Department Stores 17,000 572,050 RadioShack 9,400 219,960 Sears, Roebuck & Co. 30,700 1,312,425 Target 20,400 706,860 3,256,474 TECHNOLOGY SERVICES--1.6% Accenture 14,500 216,050 Adobe Systems 11,300 379,793 Computer Associates International 21,000 652,050 Electronic Data Systems 2,600 153,348 1,401,241 TRANSPORTATION--.7% Southwest Airlines 10,850 194,106 Union Pacific 8,400 447,468 641,574 UTILITIES--14.0% AES 10,300 (a) 341,136 AT&T 34,001 647,379 American Electric Power 4,800 219,696 BellSouth 30,500 1,137,650 Dominion Resources 3,500 220,325 Duke Energy 22,200 872,682 El Paso 3,840 186,586 Exelon 18,300 999,180 Liberty Media, CL. A 42,200 (a) 641,440 SBC Communications 42,758 1,749,230 Sprint (Fon Group) 11,000 256,740 TXU 27,200 1,291,456 UtiliCorp United 13,100 421,296 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) Verizon Communications 44,100 2,205,000 WorldCom--MCI Group 20,844 268,679 Xcel Energy 20,100 550,740 12,009,215 TOTAL COMMON STOCKS (cost $75,639,554) 84,755,693 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--.6% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.36%, 10/4/2001 150,000 149,588 3.35%, 11/1/2001 9,000 8,952 3.32%, 11/8/2001 337,000 335,002 TOTAL SHORT-TERM INVESTMENTS (cost $493,349) 493,542 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $76,132,903) 99.1% 85,249,235 CASH AND RECEIVABLES (NET) .9% 813,194 NET ASSETS 100.0% 86,062,429 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 76,132,903 85,249,235 Cash 9,104 Receivable for investment securities sold 1,140,567 Dividends receivable 182,781 Receivable for shares of Common Stock subscribed 2,047 Prepaid expenses 4,203 86,587,937 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 85,641 Payable for investment securities purchased 341,278 Payable for shares of Common Stock redeemed 62,630 Accrued expenses 35,959 525,508 ------------------------------------------------------------------------------- NET ASSETS ($) 86,062,429 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 72,078,260 Accumulated undistributed investment income--net 472,573 Accumulated net realized gain (loss) on investments 4,395,264 Accumulated net unrealized appreciation (depreciation) on investments--Note 4 9,116,332 ------------------------------------------------------------------------------- NET ASSETS ($) 86,062,429 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 4,367,564 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 19.70 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Ten Months Ended Year Ended August 31, 2001(a) October 31, 2000 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $0 and $3,916, respectively, foreign taxes withheld at source) 1,350,077 1,575,614 Interest 111,361 90,761 TOTAL INCOME 1,461,438 1,666,375 EXPENSES: Management fee--Note 3(a) 578,150 757,049 Shareholder servicing costs--Note 3(b) 274,785 370,861 Prospectus and shareholders' reports 18,399 25,766 Registration fees 14,228 16,424 Professional fees 13,286 31,039 Custodian fees--Note 3(b) 13,033 14,032 Directors' fees and expenses--Note 3(c) 972 3,200 Interest expense--Note 2 332 5,778 Miscellaneous 3,375 9,576 TOTAL EXPENSES 916,560 1,233,725 INVESTMENT INCOME--NET 544,878 432,650 ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 4,587,309 5,024,392 Net realized gain (loss) on financial futures -- (19,330) NET REALIZED GAIN (LOSS) 4,587,309 5,005,062 Net unrealized appreciation (depreciation) on investments (12,062,038) 916,298 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (7,474,729) 5,921,360 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (6,929,851) 6,354,010 (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31. SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS
Ten Months Ended Year Ended Year Ended August 31, 2001(a) October 31, 2000 October 31, 1999 ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 544,878 432,650 772,415 Net realized gain (loss) on investments 4,587,309 5,005,062 14,049,725 Net unrealized appreciation (depreciation) on investments (12,062,038) 916,298 4,265,714 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (6,929,851) 6,354,010 19,087,854 ----------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net (519,456) (635,497) (575,758) Net realized gain on investments (4,649,762) (14,240,000) -- TOTAL DIVIDENDS (5,169,218) (14,875,497) (575,758) ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 24,307,511 20,623,556 43,354,543 Dividends reinvested 5,010,665 14,415,522 548,869 Cost of shares redeemed (25,624,647) (53,910,211) (78,366,773) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 3,693,529 (18,871,133) (32,463,361) TOTAL INCREASE (DECREASE) IN NET ASSETS (8,405,540) (27,392,620) (13,951,265) ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 94,467,969 121,860,589 135,811,854 END OF PERIOD 86,062,429 94,467,969 121,860,589 Undistributed investment income--net 472,573 447,151 649,998 ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 1,170,352 958,320 1,953,625 Shares issued for dividends reinvested 243,000 681,585 25,040 Shares redeemed (1,242,100) (2,512,924) (3,307,066) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 171,252 (873,019) (1,328,401) (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31.
SEE NOTES TO FINANCIAL STATEMENTS. 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.
Ten Months Ended Year Ended October 31, --------------------------------------------------------------- August 31, 2001(a) 2000 1999 1998 1997 1996 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 22.51 24.04 21.23 21.35 18.05 15.46 Investment Operations: Investment income--net .12(b) .09(b) .13(b) .09 .07 .12 Net realized and unrealized gain (loss) on investments (1.71) 1.42 2.77 .91 4.33 4.68 Total from Investment Operations (1.59) 1.51 2.90 1.00 4.40 4.80 Distributions: Dividends from investment income--net (.12) (.13) (.09) (.06) (.11) (.21) Dividends from net realized gain on investments (1.10) (2.91) -- (1.06) (.99) (2.00) Total Distributions (1.22) (3.04) (.09) (1.12) (1.10) (2.21) Net asset value, end of period 19.70 22.51 24.04 21.23 21.35 18.05 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (7.29)(c) 7.11 13.71 4.83 25.29 34.35 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .99(c) 1.22 1.25 1.24 1.22 1.25 Ratio of interest expense to average net assets .00(c,d) .01 .01 -- -- -- Ratio of net investment income to average net assets .59(c) .43 .55 .36 .41 .93 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .06 .32 Portfolio Turnover Rate 89.62(c) 152.15 141.99 156.72 110.14 186.39 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 86,062 94,468 121,861 135,812 161,960 34,187 (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. (D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund 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 eleven 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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge. The Company's Board of Directors approved, effective April 24, 2001, a change in the fund's fiscal year end from October 31 to August 31. 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 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 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. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (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. (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 $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 based on prevailing market rates in effect at the time of borrowings. The average daily amount of borrowings outstanding under both arrangements during the period ended August 31, 2001 was approximately $9,500, with a related weighted average annualized interest rate of 4.18%. 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 professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $192,717 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 August 31, 2001, the fund was charged $48,467 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 August 31, 2001, the fund was charged $13,033 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"). 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 in person meeting 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. Subject to the Company'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. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (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. (E) During the period ended August 31, 2001, the fund incurred total brokerage commissions of $186,099, of which $1,004 was paid to Dreyfus Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation. NOTE 4--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001, amounted to $80,927,269 and $81,028,624, respectively. At August 31, 2001, accumulated net unrealized appreciation on investments was $9,116,332, consisting of $12,758,860 gross unrealized appreciation and $3,642,528 gross unrealized depreciation. At August 31, 2001, 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). 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 comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, and the related statements of operations and changes in net assets and financial highlights for each of the periods 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 August 31, 2001 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 August 31, 2001, the results of its operations, the changes in its net assets and the financial highlights for each of the indicated periods, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund IMPORTANT TAX INFORMATION (Unaudited) For Federal tax purposes, the fund hereby designates $1.0520 per share as a long-term capital gain distribution of the $1.2240 per share paid on December 7, 2000. The fund also designates 93.50% of the ordinary dividends paid during the fiscal year then ended August 31, 2001 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2002 of the percentage applicable to the preparation of their 2001 income tax returns. NOTES 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 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 251AR0801 ===================================== Dreyfus Small Company Value Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 7 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 21 Report of Independent Auditors 22 Important Tax Information FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Small Company Value Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Small Company Value Fund covers the 10-month period from November 1, 2000 through August 31, 2001. 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. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. For additional market perspectives, please visit the Market Commentary section at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Peter Higgins, Portfolio Manager How did Dreyfus Small Company Value Fund perform relative to its benchmark? For the 10-month period between the end of the fund's previous fiscal year-end on October 31, 2000 and the end of its current fiscal year on August 31, 2001, the fund produced a total return of 16.23% .(1) In comparison, the fund's benchmark, the Russell 2000 Value Index, produced a total return of 19.14% for the same period.(2) We attribute the fund' s underperformance relative to its benchmark to its overweighted position in the technology sector. On the other hand, some of the losses suffered by the fund's technology stocks were offset by our successful security selection process in the consumer services and health care areas What is the fund's investment approach? The fund seeks capital appreciation. To pursue this goal, it invests at least 65% of its total assets in value companies. The fund's stock investments may include common stocks, preferred stocks and convertible securities of both U.S. and foreign issuers. The portfolio manager identifies potential investments through extensive quantitative and fundamental research. The fund will focus on individual stock selection (a "bottom-up" approach) emphasizing three key factors: VALUE, or how a stock is valued relative to its intrinsic worth based on traditional value measures; BUSINESS HEALTH, or the overall efficiency and profitability as measured by return on assets and return on equity; and BUSINESS MOMENTUM, or the presence of a catalyst, such as corporate restructuring, change in management or a spin-off that will trigger a price increase in the near to midterm The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors influenced the fund's performance? The most significant factor influencing performance during the reporting period was the fund' s emphasis on value-oriented technology stocks. Most technology stocks are generally considered growth stocks because of their above-average earnings growth rates. Through intensive fundamental research, however, we found a number of growing technology companies that we believed were selling at attractive prices relative to their earnings, putting them firmly within the value category. In fact, the fund's best performing holding during the reporting period was a software company that makes computer network security and management programs for businesses. Because of the stock's strong business fundamentals amid high demand for Internet security-related products, we began investing in the stock in late December 2000. We then added to the position when the stock was badly bruised in the early part of 2001, and held on until the stock rose and reached our target price in mid-March 2001. At that point, we sold the stock and locked in profits. Unfortunately, as a whole the fund's technology stocks did not perform as well, and in fact, the technology sector was the major contributor to the fund's underperformance relative to the Russell 2000 Value Index. Nevertheless, we are pleased that the fund gained value in an otherwise challenging stock market environment. The bulk of the fund's total return during the reporting period came from the consumer services area, led by retail stocks, food services companies and radio broadcasting firms. At the end of 2000, we correctly anticipated that the Federal Reserve Board (the "Fed") would reduce short-term interest rates, which we thought would encourage consumers to borrow at low rates for large and small purchases. In fact, the Fed reduced short-term interest rates twice in January and five more times in subsequent months. As we expected, many of the fund's value-oriented consumer services stocks responded positively. Health care was another strong area for the fund during the reporting period. We increased the fund' s exposure to the health care group at the start of the period, believing that health care stocks had the ability to hold up better in a slower economic environment. That's because people need to take care of their health regardless of the economic environment. What is the fund's current strategy? As of the end of the reporting period, we have focused the fund's investments primarily on five key industries: consumer services, technology, energy, capital goods and basic industries. With the exception of technology, these market sectors traditionally are considered defensive. In our view, defensive areas are likely to perform better during an economic slowdown than other, more economically sensitive groups. While technology is not a traditionally defensive area, we have continued to seek value-oriented opportunities in a carefully selected group of technology companies. We are particularly attracted to technology stocks with sound business fundamentals that were hard-hit in the recent "tech wreck." By buying these stocks at low prices when they are out of favor among investors, we hope to hold them should their prices rise when investors once again discover their fundamental strengths. Of course, there is no guarantee that this will happen, and the fund's composition is subject to change as market conditions evolve. September 17, 2001 (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 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 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- FUND 12/29/93 11.10% 15.22% 16.29% ((+)) 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 $10,000 INVESTMENT MADE ON THAT DATE IN THE RUSSELL 2000 VALUE INDEX (THE "INDEX"). FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 12/31/93 IS USED AS THE BEGINNING VALUE ON 12/29/93. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE FEES AND EXPENSES. THE INDEX IS AN UNMANAGED INDEX OF SMALL-CAP VALUE STOCK PERFORMANCE. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--99.2% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- BASIC INDUSTRIES--13.2% Agrium 664,500 7,076,925 Arch Coal 360,300 6,557,460 Bethlehem Steel 415,400 (a) 606,484 Cleveland-Cliffs 180,000 3,024,000 Crompton 321,700 2,927,470 Gaylord Container, Cl. A 501,600 (a) 516,648 Georgia Gulf 120,900 2,009,358 Louisiana-Pacific 268,900 2,855,718 Massey Energy 364,500 7,162,425 Methanex 535,100 (a) 3,515,607 PolyOne 449,100 4,535,910 RPM 156,900 1,729,038 TETRA Technologies 131,900 (a) 3,008,639 Timken 152,700 2,290,500 UCAR International 69,700 (a) 885,190 48,701,372 CAPITAL GOODS--12.8% APW 616,100 (a) 4,824,063 Allen Telecom 408,300 (a) 4,989,426 Andrew 78,100 (a) 1,588,554 Applied Industrial Technologies 127,800 2,290,176 Arris Group 491,800 (a) 3,560,632 Avid Technology 20,200 (a) 203,010 Briggs & Stratton 135,800 5,146,820 Dycom Industries 217,900 (a) 3,157,371 Foster Wheeler 888,800 5,954,960 IKON Office Solutions 371,000 2,782,500 Inter-Tel 48,100 769,600 MasTec 383,900 (a) 3,858,195 Teledyne Technologies 260,600 (a) 4,021,058 Wabash National 196,800 1,908,960 Wolverine Tube 144,000 (a) 2,125,440 47,180,765 CONSUMER DURABLES--5.8% BE Aerospace 378,600 (a) 6,587,640 Champion Enterprises 107,400 (a) 1,127,700 InFocus 264,400 (a) 4,833,232 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER DURABLES (CONTINUED) KB HOME 62,900 2,036,073 U.S. Industries 1,152,400 4,275,404 Walter Industries 209,100 2,383,740 21,243,789 CONSUMER NON-DURABLES--4.5% Department 56 406,200 (a) 3,797,970 Midway Games 485,900 (a) 7,118,435 Rock-Tenn, Cl. A 145,000 1,921,250 Skechers U.S.A., Cl. A 23,900 (a) 500,705 Tommy Hilfiger 150,900 (a) 1,946,610 WestPoint Stevens 483,800 1,117,578 16,402,548 CONSUMER SERVICES--14.6% American Eagle Outfitters 78,400 (a) 2,018,800 Emmis Communications, Cl. A 102,100 (a) 2,448,358 Finish Line, Cl. A 257,800 (a) 2,513,550 Finlay Enterprises 164,600 (a) 1,859,980 Information Resources 463,100 (a) 3,403,785 Kforce 408,100 (a) 2,162,930 Linens 'n Things 79,800 (a) 2,074,800 OfficeMax 1,026,700 (a) 4,804,956 Pacific Sunwear of California 124,400 (a) 2,046,380 Papa John's International 207,200 (a) 5,231,800 Pittston Brink's Group 153,800 3,392,828 Regis 363,900 7,587,315 Six Flags 324,800 (a) 5,401,424 Stewart Enterprises, Cl. A 284,900 (a) 2,142,448 Triarc Cos. 71,000 (a) 1,760,800 Wet Seal, Cl. A 138,000 (a) 2,758,620 Zale 70,100 (a) 2,320,310 53,929,084 ENERGY--13.6% Chesapeake Energy 360,500 (a) 2,148,580 Giant Industries 25,100 (a) 242,466 Global Industries 265,200 (a) 2,140,164 Grant Prideco 238,500 (a) 2,494,710 Horizon Offshore 244,700 (a) 1,798,545 Key Energy Services 834,300 (a) 7,742,304 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) Marine Drilling Cos. 191,700 (a) 2,472,930 National-Oilwell 154,700 (a) 2,404,038 Newfield Exploration 67,000 (a) 2,208,320 Newpark Resources 148,890 (a) 1,179,209 Oceaneering International 70,700 (a) 1,378,650 Parker Drilling 836,900 (a) 3,523,349 Patterson-UTI Energy 193,300 (a) 2,715,865 Seitel 398,700 (a) 4,385,700 Tesoro Petroleum 461,300 (a) 6,033,804 Trico Marine Services 503,000 (a) 4,029,030 Veritas DGC 216,500 (a) 3,128,425 50,026,089 FINANCIAL SERVICES--1.7% Ameritrade Holding, Cl. A 294,600 (a) 1,755,816 Knight Trading Group 173,800 (a) 1,807,520 LandAmerica Financial Group 90,400 2,845,792 6,409,128 HEALTH CARE--1.8% Alpharma, Cl. A 52,400 1,645,360 Professional Detailing 137,100 (a) 4,115,742 Ventiv Health 96,600 (a) 1,009,470 6,770,572 LEISURE & TOURISM--.7% WMS Industries 127,600 (a) 2,715,328 MISCELLANEOUS--3.4% Loral Space & Communications 430,800 (a) 809,904 Maverick Tube 98,800 (a) 1,168,804 Service Corporation International 575,300 (a) 3,986,829 Terex 59,900 (a) 1,327,384 York International 135,400 5,145,200 12,438,121 TECHNOLOGY--23.7% Actel 173,200 (a) 3,905,660 AremisSoft 146,500 (a) 118,665 Art Technology Group 1,466,500 (a) 2,185,085 Artesyn Technologies 407,100 (a) 3,684,255 Ascential Software 727,650 (a) 3,434,508 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) Avnet 86,300 2,078,104 CTS 212,200 4,352,222 Credence Systems 411,100 (a) 6,939,368 Dendrite International 14,100 (a) 183,159 Forrester Research 84,500 (a) 1,669,720 Gartner, Cl. A 527,900 (a) 5,252,605 Hypercom 285,800 (a) 1,486,160 Informatica 246,900 (a) 1,891,254 InterVoice-Brite 162,500 (a) 1,837,875 Keane 121,300 (a) 2,043,905 Keynote Systems 177,400 (a) 1,463,550 Legato Systems 139,100 (a) 1,180,959 Lightbridge 149,300 (a) 1,746,810 MCSi 54,100 (a) 705,464 MRO Software 173,000 (a) 2,250,730 Mattson Technology 420,600 (a) 4,189,176 Maxtor 784,124 (a) 4,728,267 Mentor Graphics 127,500 (a) 2,103,750 Oak Technology 348,600 (a) 3,440,682 PRI Automation 281,900 (a) 5,079,838 Pioneer-Standard Electronics 45,400 545,254 SONICblue 958,300 (a) 2,204,090 Silicon Graphics 469,600 (a) 206,624 Systems & Computer Technology 155,600 (a) 2,074,148 Technology Solutions 138,800 (a) 263,720 Titan 170,500 (a) 3,162,775 Trimble Navigation 315,500 (a) 5,205,750 Varian Semiconductor Equipment Associates 165,100 (a) 5,679,440 87,293,572 TRANSPORTATION--3.4% AirTran Holdings 128,400 (a) 838,452 Atlas Air Worldwide Holdings 278,300 (a) 3,851,672 RailAmerica 237,700 (a) 3,030,675 Stolt-Nielsen, ADR 321,200 4,641,340 12,362,139 TOTAL COMMON STOCKS (cost $382,603,857) 365,472,507 Principal SHORT-TERM INVESTMENTS--1.7% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.36%, 10/25/2001 1,126,000 1,120,742 3.32%, 11/1/2001 1,954,000 1,943,663 3.29%, 11/8/2001 1,616,000 1,606,417 3.27%, 11/29/2001 1,715,000 1,701,589 TOTAL SHORT-TERM INVESTMENTS (cost $6,370,425) 6,372,411 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $388,974,282) 100.9% 371,844,918 LIABILITIES, LESS CASH AND RECEIVABLES (.9%) (3,490,461) NET ASSETS 100.0% 368,354,457 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 388,974,282 371,844,918 Cash 239,796 Receivable for investment securities sold 3,509,084 Dividends receivable 193,258 Receivable for shares of Common Stock subscribed 54,765 Prepaid expenses 23,154 375,864,975 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 356,560 Payable for investment securities purchased 6,686,086 Payable for shares of Common Stock redeemed 340,688 Accrued expenses 127,184 7,510,518 ------------------------------------------------------------------------------- NET ASSETS ($) 368,354,457 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 305,329,680 Accumulated net realized gain (loss) on investments 80,154,141 Accumulated net unrealized appreciation (depreciation) on investments--Note 4 (17,129,364) ------------------------------------------------------------------------------- NET ASSETS ($) 368,354,457 ------------------------------------------------------------------------------- SHARES OUTSTANDING (100 million shares of $.001 par value Common Stock authorized) 14,244,127 NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 25.86 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Ten Months Ended Year Ended August 31, 2001(a) October 31, 2000 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $8,441 and $1,828, respectively, foreign taxes withheld at source) 1,383,264 1,865,092 Interest 180,219 33,829 TOTAL INCOME 1,563,483 1,898,921 EXPENSES: Management fee--Note 3(a) 2,261,347 2,267,541 Shareholder servicing costs--Note 3(b) 961,238 1,068,030 Custodian fees--Note 3(b) 53,255 58,698 Professional fees 25,312 32,280 Prospectus and shareholders' reports 24,004 54,249 Registration fees 17,482 17,404 Directors' fees and expenses--Note 3(c) 7,287 6,139 Interest expense--Note 2 3,258 110,162 Miscellaneous 3,994 3,327 TOTAL EXPENSES 3,357,177 3,617,830 INVESTMENT (LOSS) (1,793,694) (1,718,909) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 86,590,831 26,952,788 Net unrealized appreciation (depreciation) on investments (35,938,518) 36,807,976 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 50,652,313 63,760,764 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 48,858,619 62,041,855 (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31. SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS
Ten Months Ended Year Ended Year Ended August 31, 2001(a) October 31, 2000 October 31, 1999 ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (1,793,694) (1,718,909) (2,365,649) Net realized gain (loss) on investments 86,590,831 26,952,788 16,860,336 Net unrealized appreciation (depreciation) on investments (35,938,518) 36,807,976 46,041,133 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 48,858,619 62,041,855 60,535,820 ----------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): NET REALIZED GAIN ON INVESTMENTS (20,257,220) (18,245,311) -- ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold 98,515,274 52,661,143 79,672,928 Dividends reinvested 19,788,666 17,817,025 -- Cost of shares redeemed (81,886,392) (80,571,640) (171,484,720) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 36,417,548 (10,093,472) (91,811,792) TOTAL INCREASE (DECREASE) IN NET ASSETS 65,018,947 33,703,072 (31,275,972) ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 303,335,510 269,632,438 300,908,410 END OF PERIOD 368,354,457 303,335,510 269,632,438 ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (SHARES): Shares sold 3,824,948 2,282,681 3,923,980 Shares issued for dividends reinvested 983,532 850,455 -- Shares redeemed (3,188,990) (3,523,250) (8,550,678) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,619,490 (390,114) (4,626,698) (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31.
SEE NOTES TO FINANCIAL STATEMENTS. 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.
Ten Months Ended Year Ended October 31, --------------------------------------------------------------- August 31, 2001(a) 2000 1999 1998 1997 1996 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 24.03 20.72 17.06 21.95 17.66 14.00 Investment Operations: Investment income (loss)--net (.13)(b) (.13)(b) (.16)(b) (.09)(b) -- .07 Net realized and unrealized gain (loss) on investments 3.57 4.85 3.82 (4.39) 6.43 4.69 Total from Investment Operations 3.44 4.72 3.66 (4.48) 6.43 4.76 Distributions: Dividends from investment income--net -- -- -- (.02) (.04) (.09) Dividends from net realized gain on investments (1.61) (1.41) -- (.39) (2.10) (1.01) Total Distributions (1.61) (1.41) -- (.41) (2.14) (1.10) Net asset value, end of period 25.86 24.03 20.72 17.06 21.95 17.66 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) 16.23(c) 23.78 21.45 (20.83) 40.22 35.99 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets .93(c) 1.16 1.23 1.21 1.23 1.27 Ratio of interest expense and dividends on securities sold short to average net assets -- .04 .05 .01 .02 .02 Ratio of net investment income (loss) to average net assets (.50)(c) (.57) (.78) (.44) .22 .62 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .05 .41 Portfolio Turnover Rate 129.27(c) 169.12 170.38 132.38 76.11 183.58 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 368,354 303,336 269,632 300,908 376,738 16,852 (A) THE FUND HAS CHANGED ITS FISCAL YEAR END FROM OCTOBER 31 TO AUGUST 31. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund 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 eleven 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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares, which are sold to the public without a sales charge. The Company's Board of Directors approved, effective April 24, 2001, a change in the fund's fiscal year end from October 31 to August 31. 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 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 the 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 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 $16,253 during the period ended August 31, 2001 based on available cash balances left on deposit. Interest earned under this arrangement is included in interest income. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (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. (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 August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $1,793,694, increased paid-in capital by $1,681,823 and decreased accumulated net realized gain (loss) on investments by $3,475,517. 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 based on prevailing market rates in effect at the time of borrowings. The average daily amount of borrowings outstanding under both arrangements during the period ended August 31, 2001 was approximately $78,500, with a related weighted average annualized interest rate of 4.98%. 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 professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, the fund was charged $753,782 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 August 31, 2001, the fund was charged $109,233 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 August 31, 2001, the fund was charged $53,255 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"). Each Board member who is not an "affiliated person" as defined in the Act The Fun NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. Subject to the Company'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. NOTE 4--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001, amounted to $471,209,387 and $460,130,860, respectively. At August 31, 2001, accumulated net unrealized depreciation on investments was $17,129,364, consisting of $29,439,575 gross unrealized appreciation and $46,568,939 gross unrealized depreciation. At August 31, 2001, 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). 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 comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, and the related statements of operations and changes in net assets and financial highlights for each of the periods 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 August 31, 2001 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 August 31, 2001, the results of its operations, the changes in its net assets and the financial highlights for each of the indicated periods, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund IMPORTANT TAX INFORMATION (Unaudited) The fund also designates 9.02% of the ordinary dividends paid during the fiscal year ended August 31, 2001 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2002 of the percentage applicable to the preparation of their 2001 tax returns. NOTES 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 9263 Boston, MA 02205-8501 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 info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 253AR0801 ==================================== Dreyfus Premier Technology Growth Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 8 Statement of Investments 10 Statement of Assets and Liabilities 11 Statement of Operations 12 Statement of Changes in Net Assets 14 Financial Highlights 19 Notes to Financial Statements 26 Report of Independent Auditors FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Technology Growth Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Premier Technology Growth Fund covers the 12-month period from September 1, 2000 through August 31, 2001. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's primary portfolio manager, Mark Herskovitz. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Mark Herskovitz, Primary Portfolio Manager How did Dreyfus Premier Technology Growth Fund perform relative to its benchmarks? For the 12-month period ended August 31, 2001, the fund produced total returns of -66.55% for Class A shares, -66.83% for Class B shares, -66.82% for Class C shares, -66.44% for Class R shares and -66.72% for Class T shares.(1) In comparison, the fund's benchmarks, the Morgan Stanley High Technology 35 Index and the Standard & Poor' s 500 Composite Stock Price Index ("S&P 500 Index") produced total returns of -57.01% and -24.38%, respectively, over the same period.(2,3 We attribute the fund' s overall performance to persistent weakness in the technology sector, which was caused primarily by reduced corporate spending and negative investor sentiment in a weakening economy. Relative to its benchmarks, the fund's performance lagged due to its overweighted position in technology, in relation to the S& P 500 Index, and the higher valuations of its technology holdings relative to those of the Morgan Stanley High Technology 35 Index, which held more mature technology stocks with lower valuations during the reporting period. What is the fund's investment approach? The fund seeks capital appreciation by investing in growth companies of any size that we believe are leading producers or beneficiaries of technological innovation. When choosing stocks, we look for sectors within the technology area that we expect to outperform other sectors. We seek to emphasize the most attractive sectors and de-emphasize the less appealing sectors. Among the sectors evaluated are those that develop, produce or distribute products or services in the computer, semiconductor, electronics, communications, biotechnology, computer software and hardware, electronic components and systems, data networking and telecommunications equipment and services. Typically, we look for companies that are leaders in their market segments and are characterized by rapid earnings growth and strong The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) market shares. We conduct extensive fundamental research to understand these companies' competitive advantages and to evaluate their ability to maintain leadership positions over time. Although we look for companies with the potential for strong earnings growth rates, some of our investments may currently be experiencing losses. Moreover, we may invest in small-, mid- and large-cap securities in all available trading markets, including initial public offerings and the aftermarket. What other factors influenced the fund's performance? Because of the slowing economy, business fundamentals deteriorated sharply within the technology sector over the past year. Most notably, demand for technological products and services declined, adversely affecting technology companies' sales and earnings during the reporting period. Communications equipment companies were particularly hard-hit because of their customers' reluctance to spend in a slower economy. As a result, many former highflyers, such as Cisco Systems, Lucent Technologies and Nortel Networks, were forced to write down large inventories of slow-selling products, leading to sharply lower earnings and stock prices. Accordingly, we have significantly reduced our holdings of telecommunications equipment manufacturers and we have virtually eliminated our holdings of wireless providers. Despite this very challenging environment, there have been several bright spots. The fund has participated in relatively strong areas, such as technology services, with investments in industry leaders Electronic Data Systems and Automatic Data Processing. These companies have withstood the full brunt of the downturn, because they have multiyear customer contracts to support their revenue streams. What is the fund's current strategy? Despite the cyclical downturn, we believe that the long-term case for technology investments remains intact. As businesses seek to become more efficient and consumers adapt to new ways of processing information, we expect that the technology group should continue to grow faster than other economic sectors over the course of a full business cycle. With that said, however, the technology group remains mired in the "hangover" that followed the "irrational exuberance" of the late 1990s. In the current environment, we believe that fundamentally sound technology companies have been unfairly punished along with more speculative businesses. Our current strategy, therefore, is to capture opportunities to acquire the stocks of growing companies at low prices and to wait patiently for the economy and business fundamentals to improve. For example, we are optimistic about the prospects of the regional Bell operating companies, which represent some of the fund' s largest individual holdings. With many smaller carriers declaring bankruptcy, these well-established companies are facing less competition. Yet their stocks are selling at the same valuations as they did when competition was much greater. We also continue to favor the software industry, which we believe is well positioned for the eventual resumption of capital spending by businesses. However, we again caution that the fund should be considered only as a supplement to an overall investment program, and even then only by investors who have the patience to wait for an improvement in the economy and business fundamentals. In the meantime, volatility probably will continue, especially if the U.S. economy remains weak. We try to manage these risks by maintaining a broadly diversified portfolio and focusing on fundamentally sound companies over the long term. September 17, 2001 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. 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: BLOOMBERG L.P. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY HIGH TECHNOLOGY 35 INDEX IS AN UNMANAGED, EQUAL DOLLAR-WEIGHTED INDEX OF 35 STOCKS FROM THE ELECTRONICS-BASED SUBSECTORS. (3) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF 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 Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Premier Technology Growth Fund Class A shares with the Morgan Stanley High Technology 35 Index and the Standard & Poor's 500 Composite Stock Price Index ((+)) SOURCE: BLOOMBERG L.P. ((+)(+)) SOURCE: LIPPER INC. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS PREMIER TECHNOLOGY GROWTH FUND ON 10/13/97 (INCEPTION DATE) TO A $10,000 INVESTMENT IN EACH OF THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX AND THE MORGAN STANLEY HIGH TECHNOLOGY 35 INDEX. FOR COMPARATIVE PURPOSES, THE VALUE OF EACH INDEX ON 9/30/97 IS USED AS THE BEGINNING VALUE ON 10/13/97. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. PERFORMANCE FOR CLASS B, CLASS C, CLASS R AND CLASS T SHARES WILL VARY FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE TO DIFFERENCES IN CHARGES AND EXPENSES. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES CHARGE ON CLASS A SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES. THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. THE MORGAN STANLEY HIGH TECHNOLOGY 35 INDEX IS AN UNMANAGED, EQUAL DOLLAR-WEIGHTED INDEX FROM THE ELECTRONICS-BASED SUBSECTORS AND INCLUDES GROSS DIVIDENDS REINVESTED. THE INDICES DO 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. Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year Inception ----------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES WITH MAXIMUM SALES CHARGE (5.75%) 10/13/97 (68.48)% 14.96% WITHOUT SALES CHARGE 10/13/97 (66.55)% 16.72% CLASS B SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)) 4/15/99 (68.16)% (10.64)% WITHOUT REDEMPTION 4/15/99 (66.83)% (9.50)% CLASS C SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)(+)) 4/15/99 (67.15)% (9.51)% WITHOUT REDEMPTION 4/15/99 (66.82)% (9.51)% CLASS R SHARES 4/15/99 (66.44)% (8.54)% CLASS T SHARES WITH APPLICABLE SALES CHARGE (4.5%) 8/31/99 (68.22)% (18.33)% WITHOUT SALES CHARGE 8/31/99 (66.72)% (16.42)% PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4%. AFTER SIX YEARS CLASS B SHARES CONVERT TO CLASS A SHARES. ((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1% FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund STATEMENT OF INVESTMENTS August 31, 2001 STATEMENT OF INVESTMENTS
COMMON STOCKS--90.0% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--1.2% Genentech 300,000 (a) 13,770,000 COMPUTER SERVICES--7.6% Automatic Data Processing 1,000,000 51,760,000 Electronic Data Systems 600,000 35,388,000 87,148,000 DATA STORAGE--3.3% Brocade Communications Systems 900,000 (a) 21,645,000 EMC 1,030,000 (a) 15,923,800 37,568,800 HARDWARE--7.0% Dell Computer 1,350,000 (a) 28,863,000 Jabil Circuit 530,000 (a) 12,248,300 NVIDIA 280,000 (a) 23,718,800 Sun Microsystems 1,350,000 (a) 15,457,500 80,287,600 INTERNET--1.3% VeriSign 350,000 (a) 14,367,500 NETWORKING--1.8% Cisco Systems 1,250,000 (a) 20,412,500 SEMICONDUCTORS--23.0% Intel 1,050,000 29,358,000 Linear Technology 765,000 31,426,200 Micrel 1,400,000 (a) 43,204,000 PMC-Sierra 800,000 (a) 24,600,000 Taiwan Semiconductor 25,300,000 (a) 46,892,558 Texas Instruments 1,130,000 37,403,000 Vitesse Semiconductor 1,250,000 (a) 18,250,000 Xilinx 800,000 (a) 31,232,000 262,365,758 SEMICONDUCTOR EQUIPMENT--9.2% Applied Materials 800,000 (a) 34,472,000 KLA-Tencor 765,000 (a) 37,592,100 Teradyne 1,000,000 (a) 32,780,000 104,844,100 SOFTWARE--13.0% Electronic Arts 450,000 (a) 25,969,500 Microsoft 675,000 (a) 38,508,750 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- SOFTWARE (CONTINUED) Oracle 1,750,000 (a) 21,367,500 Rational Software 1,850,000 (a) 26,566,000 Siebel Systems 725,000 (a) 15,660,000 Veritas Software 725,000 (a) 20,822,000 148,893,750 TELECOMMUNICATION EQUIPMENT--8.9% Comverse Technology 900,000 (a) 22,626,000 JDS Uniphase 1,050,000 (a) 7,402,500 Nokia, ADR 1,800,000 28,332,000 Nortel Networks 1,250,000 7,825,000 Qualcomm 500,000 (a) 29,425,000 Scientific-Atlanta 300,000 6,162,000 101,772,500 TELECOMMUNICATION SERVICES--13.7% BellSouth 1,275,000 47,557,500 SBC Communications 1,200,000 49,092,000 Verizon Communications 1,200,000 60,000,000 156,649,500 TOTAL COMMON STOCKS (cost $1,359,117,443) 1,028,080,008 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--10.7% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.48%, 9/20/2001 41,899,000 41,846,626 3.55%, 10/4/2001 150,000 149,588 3.42%, 10/25/2001 34,313,000 34,152,758 3.32%, 11/1/2001 5,215,000 5,187,413 3.31%, 11/8/2001 23,789,000 23,647,931 3.27%, 11/29/2001 17,908,000 17,767,959 TOTAL SHORT-TERM INVESTMENTS (cost $122,697,169) 122,752,275 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $1,481,814,612) 100.7% 1,150,832,283 LIABILITIES, LESS CASH AND RECEIVABLES (.7%) (8,445,087) NET ASSETS 100.0% 1,142,387,196 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 1,481,814,612 1,150,832,283 Cash 2,576,645 Cash denomination in foreign currencies 115,906 116,544 Receivable for investment securities sold 5,793,172 Receivable for shares of Common Stock subscribed 1,052,583 Dividends receivable 115,000 Prepaid expenses 242,583 1,160,728,810 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 1,802,982 Payable for investment securities purchased 14,219,162 Payable for shares of Common Stock redeemed 1,998,398 Accrued expenses 321,072 18,341,614 ------------------------------------------------------------------------------- NET ASSETS ($) 1,142,387,196 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 2,243,638,220 Accumulated net realized gain (loss) on investments and foreign currency transactions (770,269,333) Accumulated net unrealized appreciation (depreciation) on investments and foreign currency transactions--Note 4(b) (330,981,691) ------------------------------------------------------------------------------- NET ASSETS ($) 1,142,387,196 NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T ------------------------------------------------------------------------------------------------------------------------------------ Net Assets ($) 568,402,206 375,111,798 182,417,874 9,872,260 6,583,058 Shares Outstanding 25,171,607 16,929,497 8,235,679 434,486 294,192 ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE ($) 22.58 22.16 22.15 22.72 22.38
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Interest 6,418,413 Cash dividends (net of $346,147 foreign taxes withheld at source) 4,441,465 TOTAL INCOME 10,859,878 EXPENSES: Management fee--Note 3(a) 14,641,348 Shareholder servicing costs--Note 3(c) 8,793,197 Distribution fees--Note 3(b) 7,311,507 Prospectus and shareholders' reports 336,005 Registration fees 186,323 Custodian fees--Note 3(c) 125,977 Directors' fees and expenses--Note 3(d) 53,461 Professional fees 38,998 Interest expense--Note 2 16,045 Miscellaneous 67,406 TOTAL EXPENSES 31,570,267 INVESTMENT (LOSS) (20,710,389) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments and foreign currency transactions: Long transactions (603,337,638) Short sale transactions (14,782,651) Net realized gain (loss) on forward currency exchange contracts (194,412) NET REALIZED GAIN (LOSS) (618,314,701) Net unrealized appreciation (depreciation) on investments and foreign currency transactions (1,725,017,164) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,343,331,865) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,364,042,254) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, ------------------------------------ 2001 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (20,710,389) (23,869,283) Net realized gain (loss) on investments (618,314,701) (149,600,492) Net unrealized appreciation (depreciation) on investments (1,725,017,164) 1,286,958,240 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,364,042,254) 1,113,488,465 ------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Net realized gain on investments: Class A shares -- (4,549,696) Class B shares -- (1,632,030) Class C shares -- (835,469) Class R shares -- (35,716) Class T shares -- (13,621) TOTAL DIVIDENDS -- (7,066,532) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 801,511,272 1,686,181,939 Class B shares 153,229,818 830,678,301 Class C shares 131,350,895 533,172,623 Class R shares 10,732,950 80,808,421 Class T shares 3,781,357 16,601,656 Dividends reinvested: Class A shares -- 4,073,371 Class B shares -- 1,231,955 Class C shares -- 621,255 Class R shares -- 26,207 Class T shares -- 13,470 Cost of shares redeemed: Class A shares (761,736,949) (1,153,660,332) Class B shares (116,440,234) (81,855,087) Class C shares (141,333,241) (106,344,038) Class R shares (46,911,192) (6,359,052) Class T shares (2,977,650) (900,696) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 31,207,026 1,804,289,993 TOTAL INCREASE (DECREASE) IN NET ASSETS (2,332,835,228) 2,910,711,926 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 3,475,222,424 564,510,498 END OF PERIOD 1,142,387,196 3,475,222,424 SEE NOTES TO FINANCIAL STATEMENTS. Year Ended August 31, ------------------------------------ 2001 2000 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A (A) Shares sold 21,884,080 31,039,426 Shares issued for dividends reinvested -- 86,704 Shares redeemed (21,296,192) (20,808,284) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 587,888 10,317,846 ------------------------------------------------------------------------------- CLASS B (A) Shares sold 3,752,114 15,708,144 Shares issued for dividends reinvested -- 26,346 Shares redeemed (3,408,146) (1,438,969) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 343,968 14,295,521 ------------------------------------------------------------------------------- CLASS C Shares sold 3,134,612 9,906,575 Shares issued for dividends reinvested -- 13,298 Shares redeemed (3,929,828) (1,829,909) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (795,216) 8,089,964 ------------------------------------------------------------------------------- CLASS R Shares sold 306,152 1,334,225 Shares issued for dividends reinvested -- 557 Shares redeemed (1,139,204) (106,260) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (833,052) 1,228,522 ------------------------------------------------------------------------------- CLASS T Shares sold 92,292 298,085 Shares issued for dividends reinvested -- 287 Shares redeemed (81,319) (15,184) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 10,973 283,188 (A) DURING THE PERIOD ENDED AUGUST 31, 2001, 45,101 CLASS B SHARES REPRESENTING $2,136,753 WERE AUTOMATICALLY CONVERTED TO 44,530 CLASS A SHARES AND DURING THE PERIOD ENDED AUGUST 31, 2000, 56,893 CLASS B SHARES REPRESENTING $3,394,138 WERE AUTOMATICALLY CONVERTED TO 56,449 CLASS A SHARES. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements.
Year Ended August 31, ---------------------------------------------------------- CLASS A SHARES 2001 2000 1999 1998(a) ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 67.51 32.21 12.11 12.50 Investment Operations: Investment (loss) (.25)(b) (.43)(b) (.18)(b) (.10)(b) Net realized and unrealized gain (loss) on investments (44.68) 35.98 20.36 (.29) Total from Investment Operations (44.93) 35.55 20.18 (.39) Distributions: Dividends from net realized gain on investments -- (.25) (.08) -- Net asset value, end of period 22.58 67.51 32.21 12.11 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (66.55)(c) 110.71(c) 167.23(c) (3.12)(d,e) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 1.22 1.12 1.20 1.12(d) Ratio of interest expense to average net assets .00(f) -- -- .01(d) Ratio of net investment (loss) to average net assets (.66) (.78) (.64) (.77)(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- .02 .81(d) Portfolio Turnover Rate 100.86 112.24 78.93 291.12(d) ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 568,402 1,659,530 459,457 12,370 (A) FROM OCTOBER 13, 1997 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1998. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) CALCULATED BASED ON NET ASSET VALUE ON THE CLOSE OF BUSINESS ON OCTOBER 14, 1997 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1998. (F) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended August 31, --------------------------------------- CLASS B SHARES 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 66.81 32.13 28.25 Investment Operations: Investment (loss) (.55)(b) (.90)(b) (.16)(b) Net realized and unrealized gain (loss) on investments (44.10) 35.83 4.04 Total from Investment Operations (44.65) 34.93 3.88 Distributions: Dividends from net realized gain on investments -- (.25) -- Net asset value, end of period 22.16 66.81 32.13 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (C) (66.83) 109.06 13.73(d) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 2.04 1.93 .81(d) Ratio of interest expense to average net assets .00(e) -- -- Ratio of net investment (loss) to average net assets (1.48) (1.57) (.61)(d) Portfolio Turnover Rate 100.86 112.24 78.93 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 375,112 1,107,998 73,588 (A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) AMOUNT REPRESENTS LESS THAN .01%. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Year Ended August 31, ----------------------------------------- CLASS C SHARES 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 66.75 32.10 28.25 Investment Operations: Investment (loss) (.54)(b) (.90)(b) (.16)(b) Net realized and unrealized gain (loss) on investments (44.06) 35.80 4.01 Total from Investment Operations (44.60) 34.90 3.85 Distributions: Dividends from net realized gain on investments -- (.25) -- Net asset value, end of period 22.15 66.75 32.10 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (C) (66.82) 109.06 13.63(d) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 2.00 1.91 .82(d) Ratio of interest expense to average net assets .00(e) -- -- Ratio of net investment (loss) to average net assets (1.44) (1.55) (.62)(d) Portfolio Turnover Rate 100.86 112.24 78.93 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 182,418 602,842 30,207 (A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended August 31, --------------------------------------- CLASS R SHARES 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 67.69 32.22 28.25 Investment Operations: Investment (loss) (.14)(b) (.30)(b) (.07)(b) Net realized and unrealized gain (loss) on investments (44.83) 36.02 4.04 Total from Investment Operations (44.97) 35.72 3.97 Distributions: Dividends from net realized gain on investments -- (.25) -- Net asset value, end of period 22.72 67.69 32.22 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (66.44) 111.21 14.05(c) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets .86 .86 .44(c Ratio of interest expense to average net assets .00(d) -- -- Ratio of net investment (loss) to average net assets (.34) (.48) (.24)(c) Portfolio Turnover Rate 100.86 112.24 78.93 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 9,872 85,803 1,257 (A) FROM APRIL 15, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 1999. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. (D) AMOUNT REPRESENTS LESS THAN .01%. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Year Ended August 31, -------------------------------------------- CLASS T SHARES 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 67.26 32.21 32.21 Investment Operations: Investment (loss) (.39)(b) (.66)(b) -- Net realized and unrealized gain (loss) on investments (44.49) 35.96 -- Total from Investment Operations (44.88) 35.30 -- Distributions: Dividends from net realized gain on investments -- (.25) -- Net asset value, end of period 22.38 67.26 32.21 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (66.72)(c) 109.93(c) -- ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 1.59 1.48 -- Ratio of interest expense to average net assets .00(d) -- -- Ratio of net investment (loss) to average net assets (1.04) (1.11) -- Portfolio Turnover Rate 100.86 112.24 78.93 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 6,583 19,049 1 (A) COMMENCED OFFERING SHARES ON AUGUST 31, 1999. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Premier Technology Growth 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 eleven 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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares. The fund is authorized to issue 500 million shares of $.001 par value Common Stock. The fund currently offers five classes of shares: Class A (100 million shares authorized), Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (100 million shares authorized) and Class T (100 million shares authorized). Class A and Class T shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge (" CDSC") imposed on Class B share redemptions made within six years of purchase and automatically convert to Class A shares after six years, Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase and Class R shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the service offered to and the expenses borne by each class and certain voting rights. 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 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 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 amounts of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including amortization of discount and premium on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund received net earnings credits of $22,667 during the period ended August 31, 2001 based on available cash balances left on deposit. Income 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, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the 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. The fund has an unused capital loss carryover of approximately $54,818,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to August 31, 2001. This amount is calculated based on Federal income tax regulations which may differ from financial reporting in accordance with accounting principles generally accepted in the United States. If not applied, $7,796,000 of the carryover expires in fiscal 2008 and $47,022,000 expires in fiscal 2009. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $20,710,389 and decreased paid-in capital by that same amount. Net assets were not affected by this reclassification. NOTE 2--Bank Lines of Credit: The fund may borrow up to $5 million for leverage 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 based on prevailing market in effect at the time of borrowings The average amount of borrowings outstanding during the period ended August 31, 2001 was approximately $332,300 with a related weighted average annualized interest rate of 4.83%. 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 Distributor retained $204,507 during the period ended August 31, 2001 from commissions earned on sales of fund shares. (b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75 of 1% of the value of the average daily net assets of Class B and Class C shares and .25 of 1% of the value of the average daily net assets of Class T shares. During the period ended August 31, 2001, Class B, Class C and Class T shares were charged $4,775,689, $2,507,994 and $27,824, respectively, pursuant to the Plan. (c) Under the Shareholder Service Plan, Class A, Class B, Class C and Class T shares pay the Distributor at an annual rate of .25 of 1% of the value of their 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 industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, Class A, Class B, Class C and Class T shares were charged $2,341,613, $1,591,896, $835,998 and $27,824, respectively, 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 August 31, 2001, the fund was charged $2,132,008 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 August 31, 2001, the fund was charged $125,977 pursuant to the custody agreement. (d) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the Fund "Group"). 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 in person meeting 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. Subject to the Company'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. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (e) During the period ended August 31, 2001, the fund incurred total brokerage commissions of $2,389,349, of which $394,448 was paid to Dreyfus Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation. NOTE 4--Securities Transactions: (a) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities, during the period ended August 31, 2001: Purchases ($) Sales ($) -------------------------------------------------------------------------------- Long transactions 1,886,444,222 1,870,665,467 Short sale transactions 907,007,958 892,225,307 TOTAL 2,793,452,18 2,762,890,774 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 and to settle foreign currency transactions. When executing forward currency exchange contracts, the portfolio 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 contract. At August 31, 2001, there were no forward currency exchange contracts outstanding. The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value. The fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the fund replaces the borrowed security. The fund would realize a gain if the price of the security declines between those dates. Until the fund replaces the borrowed security, the fund will maintain daily, a segregated account with a broker or custodian, of permissible liquid assets sufficient to cover its short position. At August 31, 2001, there were no securities sold short outstanding. (b) At August 31, 2001, the cost of investments for Federal income tax purposes was $1,558,277,091; accordingly, accumulated net unrealized depreciation on investments was $407,444,808, consisting of $42,684,145 gross unrealized appreciation and $450,128,953 gross unrealized depreciation. The Fund REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Premier Technology Growth Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Premier Technology Growth Fund (one of the Series comprising Dreyfus Growth and Value Fund, Inc.) as of August 31, 2001, and the related statements of operations for the year 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 August 31, 2001 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 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 Premier Technology Growth Fund at August 31, 2001, 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 October 12, 2001 NOTES For More Information Dreyfus Premier Technology Growth Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call your financial representative or 1-800-554-4611 BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 (c) 2001 Dreyfus Service Corporation 255AR0801 ==================================== Dreyfus Premier Future Leaders Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 8 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 16 Financial Highlights 21 Notes to Financial Statements 27 Report of Independent Auditors FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Future Leaders Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Premier Future Leaders Fund covers the 12-month period from September 1, 2000 through August 31, 2001. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund' s portfolio managers, Paul Kandel and Hilary Woods. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Hilary Woods and Paul Kandel, Portfolio Managers How did Dreyfus Premier Future Leaders Fund perform relative to its benchmark? Dreyfus Premier Future Leaders Fund delivered positive results despite the negative environment that prevailed for most equities. For the 12-month period ended August 31, 2001, the fund produced a total return of 2.30% for Class A shares, 1.54% for Class B shares, 1.61% for Class C shares, 2.58% for Class R shares and 2.16% for Class T shares.(1) This exceeded the performance of the fund' s benchmark, the Russell 2000 Index, which produced a total return of -11.63% for the same period.(2) We attribute the fund's performance to good individual stock selections across a variety of sectors, industries and investment styles, which offset the negative effects of a punishing environment for most equities. What is the fund's investment approach? The fund invests primarily in a diversified portfolio of small-cap companies with total market values of $2.0 billion or less at the time of purchase. To create that portfolio, we focus primarily on emerging leaders in their respective industries. The leaders in which we invest offer products or services that we believe enhance their prospects for future earnings growth. Using fundamental research, we seek companies with dominant positions in major product lines, sustained achievement records and strong financial conditions. We also base investment decisions on the expected impact of changes in a company's management or organizational structure. Our investment approach targets growth-oriented stocks (those of companies with earnings that are expected to grow faster than the overall market) , value-oriented stocks (those that appear underpriced according to a variety of financial measurements) and stocks that exhibit both growth and value characteristics. We also diversify the fund's holdings The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) among all economic sectors represented in the Russell 2000 Index. Depending on market conditions, however, we may emphasize investments in growth- or value-oriented stocks or in economic sectors that appear particularly attractive. We typically sell a stock when the reasons for buying it no longer apply or when the company begins to show deteriorating fundamentals or poor relative performance. What other factors influenced the fund's performance? Throughout the period, a slowing U.S. economy caused a wide range of companies to post disappointing earnings and to warn of future disappointments. Nevertheless, our investment discipline and blended growth-and-value approach enabled the fund to outperform its benchmark in every industry group and investment sector. The fund achieved its best results with investments in health care, where we focused primarily on stocks of service providers, such as Beverly Enterprises, Humana and Renal Care Group. At the same time, the fund de-emphasized speculative biotechnology stocks, which generally declined. Other particularly fruitful areas of investment included the financial services group, where the fund emphasized insurers, such as Annuity and Life Re Holdings and Horace Mann Educators, and specialty finance groups, such as AmeriCredit and Global Payment. The fund also realized modest gains, relative to its benchmark, among a small number of natural gas utilities, such as Kinder Morgan Management and OGE Energy. Of course, given the generally poor performance of most equities, the fund could not achieve positive returns in every sector. Technology stocks, for example, were hit particularly hard by the economic slowdown, and energy stocks suffered due to declining oil and gas prices during the second half of the reporting period. Nevertheless, while the fund's investments in these areas declined, they held their ground relatively well compared to the benchmark. What is the fund's current strategy? As of the end of the reporting period, the fund held a smaller percentage of consumer- and technology-related stocks than its benchmark, primarily because of declining levels of consumer spending and weak business fundamentals for technology companies. While the fund also held a relatively small position in financial stocks overall, we are actively seeking investments in insurance, where the valuations are becoming attractive in the face of firming industry fundamentals. On the other hand, we recently established relatively large positions in energy, where stock prices in well-positioned companies have declined to attractive levels; in health care, where many companies remained insulated from the impact of the economic slowdown; and in materials and processing, where we believed industry fundamentals are likely to benefit from improvements in the global economy. We remain as strongly committed as ever to our blended growth-and-value approach to small-cap investing. September 17, 2001 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. 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. PART OF THE FUND'S RECENT PERFORMANCE IS ATTRIBUTABLE TO ITS INITIAL PUBLIC OFFERING (IPO) INVESTMENTS. THERE CAN BE NO GUARANTEE THAT IPOS WILL HAVE OR CONTINUE TO HAVE A POSITIVE EFFECT ON THE FUND'S PERFORMANCE. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX OF SMALL-CAP STOCK PERFORMANCE AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF THE 3,000 LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION. The Fund Comparison of change in value of $10,000 investment in Dreyfus Premier Future Leaders Fund Class A shares and the Russell 2000 Index ((+)) SOURCE: LIPPER INC. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS PREMIER FUTURE LEADERS FUND ON 6/29/00 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE RUSSELL 2000 INDEX ON THAT DATE. PERFORMANCE FOR CLASS B, CLASS C, CLASS R AND CLASS T SHARES WILL VARY FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE TO THE DIFFERENCES IN CHARGES AND EXPENSES. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES CHARGES ON CLASS A AND CLASS T SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE ON CLASS B AND CLASS C SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES ON ALL CLASSES. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX AND IS COMPOSED OF THE 2,000 SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF 3,000 OF THE LARGEST U.S. COMPANIES BY MARKET CAPITALIZATION AND 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. Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year Inception ----------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES WITH MAXIMUM SALES CHARGE (5.75%) 6/30/00 -3.56% 8.89% WITHOUT SALES CHARGE 6/30/00 2.30% 14.53% CLASS B SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)) 6/30/00 -2.46% 10.31% WITHOUT REDEMPTION 6/30/00 1.54% 13.66% CLASS C SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)(+)) 6/30/00 0.61% 13.73% WITHOUT REDEMPTION 6/30/00 1.61% 13.73% CLASS R SHARES 6/30/00 2.58% 14.80% CLASS T SHARES WITH APPLICABLE SALES CHARGE (4.5%) 6/30/00 -2.40% 9.97% WITHOUT SALES CHARGE 6/30/00 2.16% 14.39% PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4%. AFTER SIX YEARS CLASS B SHARES CONVERT TO CLASS A SHARES. ((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1% FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund STATEMENT OF INVESTMENTS August 31, 2001 STATEMENT OF INVESTMENTS
COMMON STOCKS--86.2% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES--2.5% Henry Schein 30,000 (a) 1,089,600 Ritchie Brothers Auctioneers 38,500 (a) 1,020,250 2,109,850 CONSUMER NON-DURABLES--2.5% Cott 82,500 (a) 1,107,975 Tommy Hilfiger 75,000 (a) 967,500 2,075,475 CONSUMER SERVICES--5.4% Emmis Communications, Cl. A 30,000 (a) 719,400 Entercom Communications 22,500 (a) 941,175 Martha Stewart Living Omnimedia, Cl. A 55,000 (a) 1,015,300 Meredith 23,100 751,905 THQ 21,500 (a) 1,142,725 4,570,505 ELECTRONIC TECHNOLOGY--11.5% Alpha Industries 30,000 (a) 952,800 Cognex 35,000 (a) 968,800 DRS Technologies 52,500 (a) 1,330,875 Elantec Semiconductor 30,000 (a) 1,140,000 Genesis Microchip 32,600 (a) 976,337 Loral Space & Communications 700,000 (a) 1,316,000 Photon Dynamics 31,000 (a) 1,114,760 Plexus 25,000 (a) 870,500 TranSwitch 120,000 (a) 984,000 9,654,072 ENERGY MINERALS--4.4% Cabot Oil & Gas, Cl. A 31,500 704,340 Meridian Resource 167,500 (a) 938,000 Newpark Resources 65,000 (a) 514,800 Ocean Energy 55,000 1,036,750 Unit 55,000 (a) 504,900 3,698,790 FINANCE--15.7% AmeriCredit 22,500 (a) 1,038,600 Annuity and Life Re Holdings 27,500 955,075 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- FINANCE (CONTINUED) Bank United (CPR) 2,500 (a) 775 Commerce Bancorp 12,500 844,375 Cullen/Frost Bankers 33,500 1,197,625 First Midwest Bancorp 27,000 905,580 Harbor Florida Bancshares 55,000 946,000 Horace Mann Educators 55,000 1,111,000 New York Community Bancorp 25,000 928,250 OceanFirst Financial 44,500 1,152,550 Southwest Bancorporation of Texas 32,500 (a) 1,041,300 Staten Island Bancorp 33,500 931,300 Ventas 95,000 1,114,350 Westamerica Bancorporation 27,500 1,074,700 13,241,480 HEALTH SERVICES--5.3% Beverly Enterprises 95,000 (a) 950,000 Humana 103,200 (a) 1,238,400 PSS World Medical 165,000 (a) 1,159,950 Renal Care 35,000 (a) 1,146,600 4,494,950 HEATH TECHNOLOGY--7.3% Alpharma, Cl. A 40,000 1,256,000 CIMA Labs 24,500 (a) 1,311,485 Cubist Pharmaceuticals 27,500 (a) 1,138,225 SICOR 50,000 (a) 1,180,000 United Surgical Partners International 50,000 (a) 1,242,500 6,128,210 NON-ENERGY MINERALS--3.4% Agnico-Eagle Mines 120,000 1,140,000 Bethlehem Steel 375,000 547,500 Century Aluminum 70,000 (a) 1,174,600 2,862,100 PROCESS INDUSTRIES--6.2% Casella Waste Systems, Cl.A 85,000 (a) 989,400 Crown Cork & Seal 275,000 948,750 Ivex Packaging 55,000 (a) 1,003,750 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- PROCESS INDUSTRIES (CONTINUED) Lubrizol 31,500 1,133,370 Pope & Talbot 86,000 1,101,660 5,176,930 PRODUCER MANUFACTURING--2.7% CIRCOR International 75,000 1,267,500 MagneTek 100,000 (a) 1,040,000 2,307,500 RETAIL TRADE--5.5% Electronics Boutique 32,500 (a) 1,353,625 Linens 'n Things 41,500 (a) 1,079,000 99 Cents Only Stores 34,100 (a) 1,043,119 Pier 1 Imports 92,500 1,123,875 4,599,619 TECHNOLOGY SERVICES--8.2% Global Payments 32,500 1,155,375 Integrated Circuit Systems 65,000 (a) 1,199,250 National Data 33,500 1,293,435 NetIQ 31,500 (a) 1,014,300 Network Associates 77,500 (a) 1,228,375 SmartForce Public, ADR 33,500 (a) 971,835 6,862,570 TRANSPORTATION--2.5% Frontline 75,000 1,042,500 Knight Transportation 50,000 (a) 1,101,000 2,143,500 UTILITIES--3.1% Black Hills 33,500 1,063,625 Kinder Morgan Management 10,655 (a) 782,639 Western Gas Resources 25,000 768,750 2,615,014 TOTAL COMMON STOCKS (cost $69,761,457) 72,540,565 Principal SHORT-TERM INVESTMENTS--7.8% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.42%, 9/13/2001 68,000 67,943 3.39%, 9/20/2001 345,000 344,569 3.45%, 10/4/2001 60,000 59,835 3.45%, 10/18/2001 379,000 377,480 3.45%, 10/25/2001 1,379,000 1,372,560 3.34%, 11/1/2001 2,463,000 2,449,971 3.32%, 11/8/2001 700,000 695,849 3.33%, 11/15/2001 770,000 764,949 3.55%, 11/29/2001 393,000 389,927 TOTAL SHORT-TERM INVESTMENTS (cost $6,520,429) 6,523,083 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT (cost $76,281,886) 94.0% 79,063,648 CASH AND RECEIVABLES (NET) 6.0% 5,014,452 NET ASSETS 100.0% 84,078,100 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 76,281,886 79,063,648 Cash 3,983,228 Receivable for shares of Common Stock subscribed 902,297 Receivable for investment securities sold 580,719 Dividends receivable 47,303 Prepaid expenses 35,117 84,612,312 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 83,449 Payable for investment securities purchased 390,108 Payable for shares of Common Stock redeemed 15,622 Accrued expenses 45,033 534,212 ------------------------------------------------------------------------------- NET ASSETS ($) 84,078,100 ------------------------------------------------------------------------------- COMPOSITON OF NET ASSETS ($): Paid-in capital 85,436,361 Accumulated net realized gain (loss) on investments (4,140,023) Accumulated net unrealized appreciation (depreciation) on investments--Note 4(b) 2,781,762 ------------------------------------------------------------------------------- NET ASSETS ($) 84,078,100 NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T ----------------------------------------------------------------------------------------------------------------------------------- Net Assets ($) 16,379,225 16,647,513 4,352,681 46,409,404 289,277 Shares Outstanding 1,118,360 1,146,846 299,553 3,158,607 19,778 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ($) 14.65 14.52 14.53 14.69 14.63
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $107 foreign taxes withheld at source) 203,756 Interest 93,633 TOTAL INCOME 297,389 EXPENSES: Management fee--Note 3(a) 268,997 Registration fees 80,047 Shareholder servicing costs--Note 3(c) 57,852 Distribution fees--Note 3(b) 56,837 Professional fees 39,396 Custodian fees--Note 3(c) 15,334 Prospectus and shareholders' reports 14,321 Directors' fees and expenses--Note 3(d) 539 Loan commitment fees--Note 2 110 Miscellaneous 4,569 TOTAL EXPENSES 538,002 Less-reduction in management fee due to undertaking--Note 3(a) (49,071) NET EXPENSES 488,931 INVESTMENT (LOSS) (191,542) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments: Long transactions (3,951,780) Short sale transactions (72,595) NET REALIZED GAIN (LOSS) (4,024,375) Net unrealized appreciation (depreciation) on investments 2,154,343 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,870,032) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,061,574) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, ---------------------------------- 2001 2000(a) ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (191,542) (2,182) Net realized gain (loss) on investments (4,024,375) (115,648) Net unrealized appreciation (depreciation) on investments 2,154,343 627,419 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,061,574) 509,589 ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 17,495,692 774,653 Class B shares 17,289,109 759,318 Class C shares 4,129,758 834,718 Class R shares 47,256,606 1,575,337 Class T shares 224,368 400,000 Cost of shares redeemed: Class A shares (1,956,507) (54) Class B shares (1,053,789) -- Class C shares (580,806) (10,468) Class R shares (1,136,100) -- Class T shares (371,750) -- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 81,296,581 4,333,504 TOTAL INCREASE (DECREASE) IN NET ASSETS 79,235,007 4,843,093 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 4,843,093 -- END OF PERIOD 84,078,100 4,843,093 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. SEE NOTES TO FINANCIAL STATEMENTS. Year Ended August 31, ---------------------------------- 2001 2000(a) ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A Shares sold 1,186,352 61,245 Shares redeemed (129,233) (4) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,057,119 61,241 ------------------------------------------------------------------------------- CLASS B Shares sold 1,160,507 59,570 Shares redeemed (73,231) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,087,276 59,570 ------------------------------------------------------------------------------- CLASS C Shares sold 276,564 65,233 Shares redeemed (41,437) (807) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 235,127 64,426 ------------------------------------------------------------------------------- CLASS R Shares sold 3,116,126 121,102 Shares redeemed (78,621) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 3,037,505 121,102 ------------------------------------------------------------------------------- CLASS T Shares sold 14,682 32,000 Shares redeemed (26,904) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING (12,222) 32,000 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. 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.
Year Ended August 31, --------------------- CLASS A SHARES 2001 2000(a) --------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 14.32 12.50 Investment Operations: Investment (loss) (.01)(b) (.00)(b, c) Net realized and unrealized gain (loss) on investments .34 1.82 Total from Investment Operations .33 1.82 Net asset value, end of period 14.65 14.32 ----------------------------------------------------------------------------------------- TOTAL RETURN (%) (D) 2.30 14.56(e) ------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.63 .30(e) Ratio of net investment (loss) to average net assets (.70) (.03)(e) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .20 1.12(e) Portfolio Turnover Rate 247.87 47.50(e) ---------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 16,379 877 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (D) EXCLUSIVE OF SALES CHARGE. (E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended August 31, --------------------- CLASS B SHARES 2001 2000(a) ---------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 14.30 12.50 Investment Operations: Investment (loss) (.02)(b) (.02)(b) Net realized and unrealized gain (loss) on investments .24 1.82 Total from Investment Operations .22 1.80 Net asset value, end of period 14.52 14.30 ------------------------------------------------------------------------------------------ TOTAL RETURN (%) (C) 1.54 14.40(d) ------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 2.37 .43(d) Ratio of net investment (loss) to average net assets (1.41) (.16)(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .21 1.13(d) Portfolio Turnover Rate 247.87 47.50(d) --------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 16,648 852 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended August 31, --------------------- CLASS C SHARES 2001 2000(a) --------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 14.30 12.50 Investment Operations: Investment (loss) (.02)(b) (.02)(b) Net realized and unrealized gain (loss) on investments .25 1.82 Total from Investment Operations .23 1.80 Net asset value, end of period 14.53 14.30 ------------------------------------------------------------------------------------------ TOTAL RETURN (%) (C) 1.61 14.40(d) ------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 2.37 .43(d) Ratio of net investment (loss) to average net assets (1.41) (.16)(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .32 1.21(d) Portfolio Turnover Rate 247.87 47.50(d) -------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 4,353 922 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended August 31, --------------------- CLASS R SHARES 2001 2000(a) --------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 14.32 12.50 Investment Operations: Investment income (loss)--net (.00)(b,c) .00(b,c) Net realized and unrealized gain (loss) on investments .37 1.82 Total from Investment Operations .37 1.82 Net asset value, end of period 14.69 14.32 ------------------------------------------------------------------------------------------ TOTAL RETURN (%) 2.58 14.56(d) ------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.26 .26(d) Ratio of net investment income (loss) to average net assets (.21) .02(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .10 .62(d) Portfolio Turnover Rate 247.87 47.50(d) -------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 46,409 1,734 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (D) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Year Ended August 31, --------------------- CLASS T SHARES 2001 2000(a) ---------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 14.32 12.50 Investment Operations: Investment (loss) (.01)(b) (.01)(b) Net realized and unrealized gain (loss) on investments .32 1.83 Total from Investment Operations .31 1.82 Net asset value, end of period 14.63 14.32 -------------------------------------------------------------------------------------------- TOTAL RETURN (%) (C) 2.16 14.56(d) -------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.86 .35(d) Ratio of net investment (loss) to average net assets (.90) (.05)(d) Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .67 1.12(d) Portfolio Turnover Rate 247.87 47.50(d) --------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 289 458 (A) FROM JUNE 30, 2000 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Premier Future Leaders 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 eleven series, including the fund. The fund's investment objective is capital growth. 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. Dreyfus Service Corporation (the "Distributor") is the distributor of the fund's shares. The fund is authorized to issue 500 million shares of $.001 par value Common Stock. The fund currently offers five classes of shares: Class A (100 million shares authorized) , Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (100 million shares authorized) and Class T (100 million shares authorized) . Class A and Class T shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge ("CDSC") imposed on Class B share redemptions made within six years of purchase, Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase and Class R shares are sold at net asset value per share only to institutional investors. Class B shares automatically convert to Class A shares after six years. Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. As of August 31, 2001, MBC Investment Corp., an indirect subsidiary of Mellon Financial Corporation, held 5,096 shares of Class T. 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 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 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) 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 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 $364 during the period ended August 31, 2001 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. (c) Dividends to shareholders: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain. (d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. The fund has an unused capital loss carryover of approximately $162,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to August 31, 2001. This amount is calculated based on federal income tax regulations which may differ from financial reporting in accordance with accounting principles generally accepted in the United States. If not applied, the carryover expires in fiscal 2009. During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $191,542 and decreased paid-in capital by the same amount. Net assets were not affected by this reclassification. NOTE 2--Bank Line of Credit: The fund participates with other Dreyfus-managed funds in a $500 million redemption credit facility (the "Facility" ) to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the fund based on prevailing market rates in effect at the time of borrowings. During the period ended August 31, 2001, the fund did not borrow under the Facility. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 .90 of 1% of the value of the fund's average daily net assets and is payable monthly. The Manager has undertaken from September 1, 2000 through August 31, 2001 to reduce the management fee paid by the fund, to the extent that the fund's aggregate expenses, exclusive of taxes, brokerage fees, interest on borrowings, Distribution Plan fees, Shareholder Services Plan fees, commitment fees and extraordinary expenses, exceed an annual rate of 1.50% of the value of the fund's average daily net assets. The reduction in management fee, pursuant to the undertaking, amounted to $49,071 during the period ended August 31, 2001. The Distributor retained $21,571 during the period ended August 31, 2001 from commissions earned on sales of fund's shares. (b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75 of 1% of the value of the average daily net assets of Class B and Class C shares, respectively, and .25 of 1% of the value of the average daily net assets of Class T shares. During the period ended August 31, 2001, Class B, Class C and Class T shares were charged $44,027, $12,258 and $552, respectively, pursuant to the Plan. (c) Under the Shareholder Services Plan, Class A, Class B, Class C and Class T shares pay the Distributor at an annual rate of .25 of 1% of the value of their 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 industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, Class A, Class B, Class C and Class T shares were charged $18,857, $14,676, $4,086 and $552, respectively, 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 August 31, 2001, the fund was charged $14,235 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 August 31, 2001, the fund was charged $15,334 pursuant to the custody agreement. (d) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). 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 in person meeting 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. 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. (e) During the period ended August 31, 2001, the fund incurred total brokerage commissions of $303,873, of which $1,848 was paid to Dreyfus Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 4--Securities Transactions: (a) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities, during the period ended August 31, 2001: Purchases ($) Sales ($) -------------------------------------------------------------------------------- Long transactions 141,047,495 71,369,152 Short sale transactions 603,072 530,477 TOTAL 141,650,567 71,899,629 The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value. The fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the fund replaces the borrowed security. The fund would realize a gain if the price of the security declines between those dates. Until the fund replaces the borrowed security, the fund will maintain daily, a segregated account with a broker or custodian, of permissible liquid assets sufficient to cover its short position. At August 31, 2001, there were no securities sold short outstanding. (b) At August 31, 2001, accumulated net unrealized appreciation on investments was $2,781,762, consisting of $6,292,129 gross unrealized appreciation and $3,510,367 gross unrealized depreciation. At August 31, 2001, 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). REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Premier Future Leaders Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Premier Future Leaders Fund (one of the series comprising Dreyfus Growth and Value Funds, Inc.) as of August 31, 2001, and the related statements 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 as of August 31, 2001 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 Premier Future Leaders Fund at August 31, 2001, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund NOTES For More Information Dreyfus Premier Future Leaders 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 9263 Boston, MA 02205-8501 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call your financial representative or 1-800-554-4611 BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 (c) 2001 Dreyfus Service Corporation 522AR0801 ==================================== Dreyfus Premier Strategic Value Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 8 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 16 Financial Highlights 21 Notes to Financial Statements 27 Report of Independent Auditors 28 Important Tax Information FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Strategic Value Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Premier Strategic Value Fund covers the 12-month period from September 1, 2000 through August 31, 2001. 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, Quinn Stills. As of June 29, 2001, Mr. Stills began managing the portfolio. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Quinn Stills, Portfolio Manager How did Dreyfus Premier Strategic Value Fund perform relative to its benchmark? For the 12-month period ended August 31, 2001, the fund's Class A shares produced a total return of -7.38%. Since inception on May 31, 2001, the fund's Class B, C, R and T shares produced total returns of -6.82%, -6.86%, -6.91% and -7.07% , respectively.(1) In contrast, the fund's benchmarks, the Russell 1000 Value Index and the Russell Midcap Value Index, achieved total returns of -1.12% and -12.97%, respectively, for the same reporting periods.(2,3) We attribute the fund' s and the market's weak overall performance to lower corporate earnings and investor pessimism in a slowing economy. The fund's lackluster returns relative to its benchmarks are primarily the result of weak performance among the fund's investments in the in the capital goods, energy and technology industry groups. What is the fund's investment approach? The fund seeks capital appreciation. To pursue this goal, we invest at least 65% and up to 100% of the fund's total assets in the stocks of value companies of any size. These investments may include common stocks, preferred stocks and convertible securities of both U.S. and foreign issuers. When selecting stocks for the fund, we begin with a proprietary computer model that identifies suitable candidates. Working with our team of research analysts, we then reduce that list of names by conducting fundamental research and by meeting with the management teams of the remaining candidates. Specifically, we are looking for factors that could signal a rise in the stock's price, including new products or markets, opportunities for gaining greater market share, more effective management teams or positive changes in the company's corporate structure or market perception. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors affected the fund's performance? Although the fund was negatively affected by the economic slowdown during the reporting period, the value-oriented stocks in which the fund invests held up much better than growth-oriented stocks. Growth stocks also fell steeply throughout the period and were led in their descent by formerly high-flying technology stocks. While the fund's relative performance benefited from its focus on value-oriented stocks, returns were hurt by individual stock selections within certain industry groups. For example, in the capital goods sector, we believe that defense contractor Honeywell lost value when its plans to be acquired by General Electric were derailed by European regulators. In the technology group, semiconductor Texas Instruments suffered from the effects of lower demand for its products from telecommunications equipment manufacturers. Finally, our focus on exploration and drilling companies hurt the fund's energy sector performance when oil prices fell during the second half of the reporting period. These negative returns were partially offset by gains in other areas, however. For example, our health care investments fared particularly well, driven higher by pharmaceutical companies SICOR and Alpharma, as well as health care products distributor Henry Schein Inc. The fund also benefited from our individual stock selections in the consumer staples and communications services groups. What is the fund's current strategy? We have made a number of substantial changes recently, including the fund's name. Strategically, however, we continue to look for companies selling at inexpensive valuations relative to their own history and to similar companies within the same industry or companies with similar financial characteristics in other industries. We seek companies with sound or improving business fundamentals, as well as the presence of a catalyst that is likely to unlock the stock' s value. We attempt to find such opportunities through intensive research into individual companies. For example, our above-average exposure to the health care sector is a result of our view that many stocks within the group enjoy improving business fundamentals but are priced inexpensively compared to their own histories. On the other hand, we have de-emphasized the energy area, because we believe that many of these companies are expensively valued in an environment of falling oil and gas prices. In other areas, the dramatic decline of most technology stocks affected both speculative and well-established companies, including some with excellent business fundamentals, in our opinion. We have found some attractive values among the latter group, and we have increased the fund's technology exposure accordingly. In the financial services group, we have reduced our holdings of banks and increased our exposure to asset managers, thrifts and insurance companies. September 17, 2001 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. 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 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. (3) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL MIDCAP VALUE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE AND MEASURES THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Premier Strategic Value Fund Class A shares with the Russell Midcap Value Index and the Russell 1000 Value Index ((+)) SOURCE: LIPPER INC. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS PREMIER STRATEGIC VALUE FUND ON 9/29/95 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE ON THAT DATE IN EACH OF THE RUSSELL 1000 VALUE INDEX AND THE RUSSELL MIDCAP VALUE INDEX. ON MAY 31, 2001, DREYFUS PREMIER STRATEGIC VALUE FUND ADOPTED A MULTI-CLASS SHARE STRUCTURE. THE CLASSES WILL INCLUDE A, B, C, R, AND T SHARES. THE EXISTING FUND SHARES WERE DESIGNATED AS CLASS A SHARES AND EXISTING SHAREHOLDERS WERE GRANDFATHERED. PERFORMANCE FOR CLASS B, CLASS C, CLASS R AND CLASS T SHARES WILL VARY FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE TO THE DIFFERENCES IN CHARGES AND EXPENSES. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES CHARGE ON CLASS A SHARES AND ALL APPLICABLE FEES AND EXPENSES. THE RUSSELL 1000 VALUE INDEX USES COMPANY PRICE-TO-BOOK RATIOS AND LONG-TERM GROWTH RATES TO CALCULATE A COMPOSITE RANKING WHICH IS USED TO DETERMINE IF A STOCK IS "GROWTH" OR "VALUE." THE RUSSELL MIDCAP VALUE INDEX IS AN UNMANAGED INDEX OF THE PERFORMANCE OF THOSE RUSSELL MIDCAP COMPANIES WITH LOWER PRICE-TO-BOOK RATIOS AND LOWER FORECASTED GROWTH VALUES. THE FOREGOING INDICES DO 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 Average Annual Total Returns AS OF 8/31/01
Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES WITH MAXIMUM SALES CHARGE (5.75%) 9/29/95 (12.71)% 11.28% 18.62% WITHOUT SALES CHARGE 9/29/95 (7.38)% 12.61% 19.81% Actual Aggregate Total Returns AS OF 8/31/01 Inception From Date 1 Year 5 Years Inception ----------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)) 5/31/01 -- -- (10.55)% WITHOUT REDEMPTION 5/31/01 -- -- (6.82)% CLASS C SHARES WITH APPLICABLE REDEMPTION CHARGE ((+)(+)) 5/31/01 -- -- (7.80)% WITHOUT REDEMPTION 5/31/01 -- -- (6.86)% CLASS R SHARES 5/31/01 -- -- (6.91)% CLASS T SHARES WITH APPLICABLE SALES CHARGE (4.5%) 5/31/01 -- -- (11.24)% WITHOUT SALES CHARGE 5/31/01 -- -- (7.07)% PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4%. AFTER SIX YEARS CLASS B SHARES CONVERT TO CLASS A SHARES. ((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1% FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund STATEMENT OF INVESTMENTS August 31, 2001
COMMON STOCKS--95.9% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- APPLIANCES & HOUSEHOLD DURABLES--.9% Koninklijke (Royal) Philips Electronics (New York Shares) 38,600 1,033,322 BASIC INDUSTRIES--2.1% Air Products & Chemicals 21,800 924,320 duPont (E.I.) deNemours & Co. 27,200 1,114,384 Solutia 37,500 517,875 2,556,579 BROADCASTING & PUBLISHING--.5% Fox Entertainment Group, Cl. A 23,300 (a) 571,316 CAPITAL GOODS--7.9% Eaton 14,000 1,007,020 Emerson Electric 18,600 996,960 Illinois Tool Works 21,800 1,362,718 Pitney Bowes 59,400 2,583,306 Rockwell Collins 14,900 302,768 Rockwell International 14,900 239,145 United Technologies 42,900 2,934,360 9,426,277 CONSUMER DURABLES--2.7% Ford Motor 41,800 830,566 Maytag 79,200 2,433,816 3,264,382 CONSUMER NON-DURABLES--6.3% Bemis 13,200 577,632 Clorox 36,200 1,348,450 Constellation Brands, Cl. A 35,600 (a) 1,507,660 Fortune Brands 38,400 1,468,800 Jones Apparel Group 6,500 (a) 207,350 NIKE, Cl. B 23,400 1,170,000 Procter & Gamble 4,900 363,335 UST 28,700 947,100 7,590,327 CONSUMER SERVICES--6.9% Circuit City Stores- Circuit City Group 44,100 736,470 Federated Department Stores 55,800 (a) 2,026,098 Liberty Media, Cl. A 179,200 (a) 2,723,840 Penney (J.C.) 17,600 422,400 RadioShack 68,300 1,598,220 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER SERVICES (CONTINUED) Wal-Mart Stores 12,900 619,845 Young Broadcasting, Cl. A 7,400 (a) 168,350 8,295,223 ENERGY--7.5% BP, ADS 45,400 2,309,952 El Paso 4,400 213,796 Exxon Mobil 78,398 3,147,680 Royal Dutch Petroleum (New York Shares) 18,300 1,036,329 Schlumberger 20,400 999,600 Texaco 5,700 397,005 Williams Communications Group 21,100 (a) 34,815 Williams Cos. 25,100 817,005 8,956,182 FINANCIAL SERVICES--19.3% Alliance Capital Management Holding 61,000 3,193,960 Astoria Financial 43,100 2,542,900 Citigroup 75,807 3,468,170 Fannie Mae 5,700 434,397 Golden State Bancorp 84,700 2,542,694 Golden West Financial 63,800 3,692,106 Lehman Brothers Holdings 30,300 1,989,195 Merrill Lynch 22,000 1,135,200 Morgan Stanley Dean Witter & Co. 24,400 1,301,740 Stilwell Financial 99,300 2,839,980 23,140,342 HEALTH CARE--10.3% Johnson & Johnson 60,000 3,162,600 Merck & Co. 27,400 1,783,740 Oxford Health Plans 21,000 (a) 629,580 Wellpoint Health Networks 62,600 (a) 6,665,648 Zimmer Holdings 1,230 33,456 12,275,024 INSURANCE--8.4% Allmerica Financial 31,400 1,672,678 Allstate 38,600 1,309,698 American International Group 42,472 3,321,318 Marsh & McLennan Cos. 13,900 1,291,310 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE (CONTINUED) Old Republic International 91,600 2,459,460 10,054,464 LEISURE & TOURISM--1.3% Mandalay Resort Group 63,600 (a) 1,582,368 RECREATION--.8% Hasbro 53,400 925,956 TECHNOLOGY--13.5% AT&T Wireless Services 3,700 (a) 57,350 Apple Computer 92,800 (a) 1,721,440 Avaya 24,600 279,456 Axcelis Technologies 16,500 (a) 230,175 BMC Software 8,500 (a) 136,000 Computer Sciences 13,900 (a) 522,640 Compuware 18,700 (a) 228,327 Harmonic 9,000 (a) 135,000 Intel 22,000 615,120 International Business Machines 52,500 5,250,000 KLA-Tencor 32,600 (a) 1,601,964 KPMG Consulting 10,600 156,138 Motorola 95,800 1,666,920 Nortel Networks 88,500 554,010 Sun Microsystems 21,200 (a) 242,740 3Com 267,100 (a) 1,097,781 Teleflex 34,300 1,687,560 16,182,621 TELECOMMUNICATIONS--1.5% Advanced Fibre Communications 4,200 (a) 101,850 Cable & Wireless, ADS 24,100 357,885 Sprint (FON Group) 39,800 928,932 Sprint (PCS Group) 15,700 (a) 392,186 1,780,853 TRANSPORTATION--3.4% Canadian National Railway 14,900 648,150 KLM Royal Dutch Airlines (New York Shares) 9,000 136,800 Southwest Airlines 122,700 2,195,103 USFreightways 31,000 1,128,400 4,108,453 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES--2.6% AT&T 11,600 220,864 British Telecommunications, ADR 12,100 757,581 Mirant 3,300 94,545 NiSource 8,100 19,845 Scottish Power, ADR 31,300 887,355 Telephone and Data Systems 11,000 1,135,750 3,115,940 TOTAL COMMON STOCKS (cost $115,237,728) 114,859,629 ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS--1.0% ----------------------------------------------------------------------------------------------------------------------------------- MISCELLANEOUS; News, ADS, Cum.,$.4428 (cost $1,369,950) 43,000 1,193,250 ----------------------------------------------------------------------------------------------------------------------------------- Principal SHORT-TERM INVESTMENTS--2.5% Amount ($) Value ($) ----------------------------------------------------------------------------------------------------------------------------------- U.S. TREASURY BILLS: 3.52%, 10/4/2001 150,000 149,588 3.28%, 10/25/2001 156,000 155,271 3.34%, 11/1/2001 1,992,000 1,981,462 3.34%, 11/8/2001 76,000 75,549 3.32%, 11/23/2001 295,000 292,841 3.29%, 11/29/2001 378,000 375,044 TOTAL SHORT-TERM INVESTMENTS (cost $3,028,660) 3,029,755 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $119,636,338) 99.4% 119,082,634 CASH AND RECEIVABLES (NET) .6% 756,302 NET ASSETS 100.0% 119,838,936 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 119,636,338 119,082,634 Cash 235,060 Receivable for investment securities sold 411,930 Dividends receivable 237,009 Receivable for shares of Common Stock subscribed 40,154 Prepaid expenses 49,802 120,056,589 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 117,033 Payable for shares of Common Stock redeemed 20,496 Accrued expenses 80,124 217,653 ------------------------------------------------------------------------------- NET ASSETS ($) 119,838,936 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 116,627,821 Accumulated undistributed investment income--net 405,998 Accumulated net realized gain (loss) on investments 3,358,821 Accumulated net unrealized appreciation (depreciation) on investments--Note 4(b) (553,704 ------------------------------------------------------------------------------- NET ASSETS ($) 119,838,936 NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T ----------------------------------------------------------------------------------------------------------------------------------- Net Assets ($) 119,454,786 257,853 124,436 931 929.69 Shares Outstanding 5,321,166 11,513 5,557 41.597 41.597 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ($) 22.45 22.40 22.39 22.38 22.35
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $2,193 foreign taxes withheld at source) 1,567,553 Interest 181,919 TOTAL INCOME 1,749,472 EXPENSES: Management fee--Note 3(a) 762,661 Shareholder servicing costs-Note 3(c) 446,994 Registration fees 25,351 Professional fees 24,191 Prospectus and shareholders' reports 24,013 Custodian fees--Note 3(c) 19,483 Directors' fees and expenses--Note 3(d) 3,317 Interest expense--Note 2 621 Distribution fees--Note 3(b) 359 Miscellaneous 2,049 TOTAL EXPENSES 1,309,039 INVESTMENT INCOME--NET 440,433 ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments: Long transactions 6,543,737 Short sale transactions 253,385 NET REALIZED GAIN (LOSS) 6,797,122 Net unrealized appreciation (depreciation) on investments (15,560,036) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (8,762,914) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,322,481) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended August 31, ---------------------------------- 2001(a) 2000 ------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 440,433 1,129,464 Net realized gain (loss) on investments 6,797,122 9,266,178 Net unrealized appreciation (depreciation) on investments (15,560,036) 7,684,636 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,322,481) 18,080,278 ------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net: Class A shares (1,160,972) (200,027) Net realized gain on investments: Class A shares (12,184,102) (6,627,196) TOTAL DIVIDENDS (13,345,074) (6,827,223) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 75,613,845 19,931,331 Class B shares 281,099 -- Class C shares 136,646 -- Class R shares 1,000 -- Class T shares 1,000 -- Dividends reinvested: Class A shares 13,054,661 6,588,816 Cost of shares redeemed: Class A shares (25,534,300) (32,045,777) Class B shares (11,604) -- Class C shares (7,236) -- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 63,535,111 (5,525,630) TOTAL INCREASE (DECREASE) IN NET ASSETS 41,867,556 5,727,425 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 77,971,380 72,243,955 END OF PERIOD 119,838,936 77,971,380 Undistributed investment income--net 405,998 1,126,537 (A) THE FUND CHANGED TO A FIVE CLASS FUND ON JUNE 1, 2001. THE EXISTING SHARES WERE REDESIGNATED CLASS A SHARES. SEE NOTES TO FINANCIAL STATEMENTS. Year Ended August 31, ---------------------------------- 2001(a) 2000 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A Shares sold 3,105,009 777,490 Shares issued for dividends reinvested 563,673 289,364 Shares redeemed (1,054,158) (1,306,987) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,614,524 (240,133) ------------------------------------------------------------------------------- CLASS B Shares sold 11,999 -- Shares redeemed (486) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 11,513 -- ------------------------------------------------------------------------------- CLASS C Shares sold 5,863 -- Shares redeemed (306) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,557 -- ------------------------------------------------------------------------------- CLASS R SHARES SOLD 42 -- ------------------------------------------------------------------------------- CLASS T SHARES SOLD 42 -- (A) THE FUND CHANGED TO A FIVE CLASS FUND ON JUNE 1, 2001. THE EXISTING SHARES WERE REDESIGNATED CLASS A SHARES. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. 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.
Year Ended August 31, --------------------------------------------------------------------- CLASS A SHARES 2001(a) 2000 1999 1998 1997 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 28.81 24.52 20.45 26.40 20.08 Investment Operations: Investment income--net .11(b) .43(b) .05(b) .05 .02 Net realized and unrealized gain (loss) on investments (2.10) 6.46 5.11 (4.27) 8.22 Total from Investment Operations (1.99) 6.89 5.16 (4.22) 8.24 Distributions: Dividends from investment income-net (.38) (.08) (.04) (.03) (.05) Dividends from net realized gain on investments (3.99) (2.52) (1.05) (1.70) (1.87) Total Distributions (4.37) (2.60) (1.09) (1.73) (1.92) Net asset value, end of period 22.45 28.81 24.52 20.45 26.40 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (7.38)(c) 30.88 25.41 (17.02) 43.57 ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of operating expenses to average net assets 1.29 1.34 1.29 1.27 1.24 Ratio of interest expense to average net assets .00(d) .00(d) .01 .01 -- Ratio of net investment income to average net assets .43 1.72 .22 .16 .18 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- .14 Portfolio Turnover Rate 337.44 235.16 225.12 170.46 120.71 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 119,455 77,971 72,244 91,909 159,529 (A) THE FUND CHANGED TO A FIVE CLASS FUND ON JUNE 1, 2001. THE EXISTING SHARES WERE REDESIGNATED CLASS A SHARES. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS. Period Ended CLASS B SHARES August 31, 2001(a) ------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 24.04 Investment Operations: Investment (loss) (.02)(b) Net realized and unrealized gain (loss) on investments (1.62) Total from Investment Operations (1.64) Net asset value, end of period 22.40 ------------------------------------------------------------------------------- TOTAL RETURN (%) (C) (6.82)(d) ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .57(d) Ratio of net investment (loss) to average net assets (.09)(d) Portfolio Turnover Rate 337.44 ------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 258 (A) FROM JUNE 1, 2001 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 2001. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Period Ended CLASS C SHARES August 31, 2001(a) ------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 24.04 Investment Operations: Investment (loss) (.01)(b) Net realized and unrealized gain (loss) on investments (1.64) Total from Investment Operations (1.65) Net asset value, end of period 22.39 ------------------------------------------------------------------------------- TOTAL RETURN (%) (C) (6.86)(d) ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .57(d) Ratio of net investment (loss) to average net assets (.06)(d) Portfolio Turnover Rate 337.44 ------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 124 (A) FROM JUNE 1, 2001 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 2001. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. Period Ended CLASS R SHARES August 31, 2001(a) ------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 24.04 Investment Operations: Investment (loss) (.04)(b) Net realized and unrealized gain (loss) on investments (1.62) Total from Investment Operations (1.66) Net asset value, end of period 22.38 ------------------------------------------------------------------------------- TOTAL RETURN (%) (6.91)(c) ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .60(c) Ratio of net investment (loss) to average net assets (.19)(c) Portfolio Turnover Rate 337.44 ------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 1 (A) FROM JUNE 1, 2001 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 2001. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Period Ended CLASS T SHARES August 31, 2001(a) ------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 24.04 Investment Operations: Investment (loss) (.07)(b) Net realized and unrealized gain (loss) on investments (1.62) Total from Investment Operations (1.69) Net asset value, end of period 22.35 ------------------------------------------------------------------------------- TOTAL RETURN (%) (C) (7.07)(d) ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .73(d) Ratio of net investment (loss) to average net assets (.32)(d) Portfolio Turnover Rate 337.44 ------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 1 (A) FROM JUNE 1, 2001 (COMMENCEMENT OF INITIAL OFFERING) TO AUGUST 31, 2001. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Premier Strategic 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 eleven 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. On March 28, 2001, the Company's Board of Directors approved to (i) change the name of the fund to Dreyfus Premier Strategic Value Fund; (ii) classify the fund' s current outstanding shares as Class A shares; and (iii) increase the fund' s authorized shares and classifying such shares as Class B, Class C, Class R and Class T shares. These changes took effect on June 1, 2001. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares. The fund is authorized to issue 500 million shares of $.001 par value Common Stock. The fund currently offers five classes of shares: Class A (100 million shares authorized), Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (100 million shares authorized) and Class T (100 million shares authorized). Class A and Class T shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge (" CDSC") imposed on Class B share redemptions made within six years of purchase and automatically convert to Class A shares after six years, Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase and Class R shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. As of August 31, 2001, MBC Investment Corp., an indirect subsidiary of Mellon Financial Corporation, held all of the outstanding Class R and Class T shares of the fund. 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 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 amounts of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains 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 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 $3,054 during the period ended August 31, 2001 based on available cash balances left on deposit. Income 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 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 The Fun NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 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 based on prevailing market rates in effect at the time of borrowings. The average daily amount of borrowings outstanding during the period ended August 31, 2001 was approximately $13,800, with a related weighted average annualized interest rate of 4.50%. 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 Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75 of 1% of the value of the average daily net assets of Class B and Class C shares and .25 of 1% of the value of the average daily net assets of Class T shares. During the period ended August 31, 2001, Class B, Class C and Class T shares were charged $240, $118 and $1, respectively, pursuant to the Plan. (C) Under the Shareholder Services Plan, Class A, Class B, Class C and Class T shares pay the Distributor at an annual rate of .25 of 1% of the value of their 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 regard ing 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 industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, Class A, Class B, Class C and Class T shares were charged $254,100, $80, $39 and $1, respectively, 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 August 31, 2001, the fund was charged $58,514 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 August 31, 2001, the fund was charged $19,483 pursuant to the custody agreement. (D) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). 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 in person meeting 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. Subject to the Company'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. (E) During the period ended August 31, 2001, the fund incurred total brokerage commissions of $858,407, of which $11,940 was paid to Dreyfus Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 4--Securities Transactions: (A) The following summarizes the aggregate amount of purchases and sales of investment securities and securities sold short, excluding short-term securities, during the period ended August 31, 2001: Purchases ($) Sales ($) -------------------------------------------------------------------------------- Long transactions 381,141,252 332,741,325 Short sale transactions 19,231,933 19,485,318 TOTAL 400,373,185 352,226,643 The fund is engaged in short-selling which obligates the fund to replace the security borrowed by purchasing the security at current market value. The fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the fund replaces the borrowed security. The fund would realize a gain if the price of the security declines between those dates. Until the fund replaces the borrowed security, the fund will maintain daily, a segregated account with a broker and custodian, of permissible liquid assets sufficient to cover its short position. At August 31, 2001, there were no securities sold short outstanding. (B) At August 31, 2001, accumulated net unrealized depreciation on investments was $553,704, consisting of $2,873,245 gross unrealized appreciation and $3,426,949 gross unrealized depreciation. At August 31, 2001, 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). REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Premier Strategic Value Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Premier Strategic Value Fund (one of the Series comprising Dreyfus Growth and Value Funds, Inc.), as of August 31, 2001, 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 August 31, 2001 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 Premier Strategic Value Fund at August 31, 2001, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 The Fund IMPORTANT TAX INFORMATION (Unaudited) For Federal tax purposes the fund hereby designates $1.1720 per share as a long-term capital gain distribution of the $4.3680 per share paid on December 4, 2000. The fund also designates 15.55% of the ordinary dividends paid during the fiscal year ended August 31, 2001 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2002 of the percentage applicable to the preparation of their 2001 income tax returns. The Fund For More Information Dreyfus Premier Strategic 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 9263 Boston, MA 02205-8501 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call your financial representative or 1-800-554-4611 BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 (c) 2001 Dreyfus Service Corporation 257AR0801 ==================================== Dreyfus Premier Structured Mid Cap Fund ANNUAL REPORT August 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Statement of Investments 11 Statement of Assets and Liabilities 12 Statement of Operations 13 Statement of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 22 Report of Independent Auditors FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Structured Mid Cap Fund LETTER FROM THE CHAIRMAN Dear Shareholder: This annual report for Dreyfus Premier Structured Mid Cap Fund covers the period from the fund' s inception on June 29, 2001 through August 31, 2001. 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, Michael Dunn. It is impossible to address the economy and the financial markets without mention of the devastating events that befell the U.S. on Tuesday, September 11, 2001. On behalf of The Dreyfus Corporation, I would like to extend heartfelt sympathies to all who have been touched by these tragedies. Even before the September 11 attacks, a slowing economy and a return to more normal valuations took their toll on stocks that had previously risen too high, too fast. And, realistically, we must prepare ourselves for an investment environment that may become even more challenging in the wake of these traumatic events. Over the past 50 years, we at Dreyfus have seen investment climates wax and wane, alternately leading to optimism and pessimism among investors. But, through it all, three enduring investment principles have helped investors weather the periodic storms: ASSET ALLOCATION, DIVERSIFICATION and a LONG-TERM PERSPECTIVE. Together, these investing basics have consistently demonstrated their potential to improve performance, mitigate risk and combat volatility, even during exaggerated market swings. Given the current market environment, now might be a good time to ensure that your investments are appropriately allocated and diversified for the long term. We encourage you to contact your financial advisor for information about ways to refine your investment strategies. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation September 17, 2001 DISCUSSION OF FUND PERFORMANCE Michael Dunn, Portfolio Manager How did Dreyfus Premier Structured Mid Cap Fund perform relative to its benchmark? From its inception on June 29, 2001 to the end of the annual reporting period on August 31, 2001, the fund produced a total return of -5.68% for Class A shares, -5.84% for Class B shares, -5.84% for Class C shares, -5.68% for Class R shares and -5.76% for Class T shares.(1) In comparison, the Russell Midcap Index produced a total return of -6.60% for the same period.(2) We believe that two months is too brief a time to accurately assess the performance of any long-term investment. However, market weakness over the past two months was primarily concentrated among growth stocks. Those losses, however, were slightly cushioned by better returns produced by the fund's value-oriented holdings. What is the fund's investment approach? The fund seeks long-term capital growth. To pursue this goal, the fund invests primarily in a blended portfolio of growth and value stocks of medium-size companies whose market values generally range between $2 billion and $10 billion at the time of purchase. However, since the fund may continue to hold a security as its market capitalization grows, a substantial portion of the fund's holdings may have market values in excess of $10 billion at any given time. The fund's stock investments may include common stocks, preferred stocks and convertible securities of U.S. and foreign issuers. When selecting stocks for the fund, we utilize a "bottom-up," structured approach that seeks to identify undervalued securities using a quantitative screening process. This process is driven by computer models that identify and rank stocks based on: *FUNDAMENTAL MOMENTUM, such as reported and forecasted earnings for a company relative to its past, peers and the models' overall stock universe; The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) *RELATIVE VALUE, such as current and forecasted price-to-earnings ratios, yields and other price-sensitive data for a stock compared to its past, peers and the models' overall stock universe; *FUTURE CASH FLOW, which is a stock's potential price appreciation based on historical information and analysts' forecasts of return on capital, earnings and dividends; and *ADDITIONAL FACTORS, such as trading by company insiders or stock pricing variables and historical information. We select what we believe to be the most attractive of the top-ranked securities for the fund. We will generally sell a stock that falls below the median ranking, and we may reinvest the proceeds in a top-ranked security in order to remain fully invested. What other factors influenced the fund's performance? The fund was most influenced by our disciplined approach to stock selection during the reporting period. Using a proprietary computer model, we evaluate more than 4,000 stocks on a variety of value and growth characteristics. Only stocks rated highly by this "blended" process are considered as potential holdings. This process-driven approach does not consider broad economic or market trends, such as stock market activities, interest-rate movements, the market's current preference for value versus the growth style of investing or changes within industries or sectors. In fact, our proprietary computer model screens out these factors in an attempt to reduce risk. By design, the fund' s largest holdings will have a combination of favorable value and growth characteristics. For the two-month reporting period, the top five stocks meeting these criteria were Dole Food Co., the worldwide food distributor; Greenpoint Financial, which offers home finance and consumer banking services; Valero Energy, a diversified energy company; M&T Bank, a banking and financial services conglomerate; and UtiliCorp United, a full-service energy company. What is the fund's current strategy? Our strategy remains the same as it was at the fund's inception. In fact, as quantitative managers, we intend to change the fund's strategy very little, regardless of changes in market conditions. That's because our quantitative models are designed to find stocks with superior value and growth characteristics in virtually any economic or market environment. In our view, sticking to such a disciplined process is an excellent way to eliminate the " market noise" that often distracts portfolio managers from finding stocks that are likely to outpace the market averages. In addition, we believe that our quantitative approach can help manage risks. For example, our process is designed to provide a high level of diversification, with risk typically spread among more than 150 stocks. Our process is also designed to ensure that the fund is never tilted toward one investment style or another, which we believe can help further manage portfolio risk. We welcome the opportunity to put our disciplined investment approach to work for you as you pursue your long-term financial goals. September 17, 2001 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE CASE OF CLASS A AND CLASS T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE YIELD AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH AUGUST 31, 2002, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. (2) SOURCE: LIPPER INC.-- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL MIDCAP INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE. The Fund August 31, 2001 STATEMENT OF INVESTMENTS
COMMON STOCKS--96.6% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES--4.5% Avnet 800 19,264 Ceridian 900 (a) 17,505 SEI Investments 100 4,104 SunGard Data Systems 400 (a) 9,460 Viad 600 15,780 Wallace Computer Services 1,200 20,220 86,333 COMMUNICATIONS--.5% Telephone and Data Systems 100 10,325 CONSUMER DURABLES--3.3% Bandag 200 5,926 Electronic Arts 200 (a) 11,542 International Game Technology 200 (a) 10,704 Lennar 600 26,730 Mohawk Industries 200 (a) 8,920 63,822 CONSUMER NON-DURABLES--5.8% Dole Food Co. 1,100 26,389 Hormel Foods 400 10,188 Jones Apparel Group 700 (a) 22,330 PepsiAmericas 1,400 21,980 R.J. Reynolds Tobacco Holdings 100 5,775 Smithfield Foods 200 (a) 8,850 Universal 400 16,972 112,484 CONSUMER SERVICES--5.5% Apollo Group, Cl. A 700 (a) 27,559 Cablevision Systems, Cl. A 100 (a) 4,670 Entercom Communications 200 (a) 8,366 HomeStore.com 300 (a) 4,971 Lone Star Steakhouse & Saloon 800 9,960 Mandalay Resort Group 900 (a) 22,392 Papa John's International 400 (a) 10,100 Travelocity.com 200 (a) 4,784 USA Networks 200 (a) 4,632 Westwood One 300 (a) 8,550 105,984 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONIC TECHNOLOGY--9.8% ADTRAN 200 (a) 4,630 Advanced Micro Devices 300 (a) 4,065 Atmel 1,000 (a) 9,590 FEI Co. 100 (a) 3,483 International Rectifier 200 (a) 7,396 LTX 300 (a) 5,373 L-3 Communications Holdings 300 (a) 20,130 Lam Research 900 (a) 25,479 MIPS Technologies, Cl. B 400 (a) 3,380 Mentor Graphics 800 (a) 13,200 NVIDIA 300 (a) 25,413 Plantronics 200 (a) 3,980 Storage Technology 1,500 (a) 21,450 Synopsys 400 (a) 18,456 UTStarcom 500 (a) 8,375 Vishay Intertechnology 600 (a) 13,998 188,398 ENERGY MINERALS--2.4% Ocean Energy 900 16,965 Valero Energy 700 29,050 46,015 FINANCE--16.4% Allmerica Financial 200 10,654 AmeriCredit 300 (a) 13,848 Associated Banc-Corp 700 23,737 CNA Financial 200 (a) 5,554 First Tennessee National 900 28,989 Golden State Bancorp 900 27,018 GreenPoint Financial 800 31,536 Hibernia, Cl. A 1,500 25,935 M&T Bank 500 36,325 Marshall & Ilsley 600 33,372 Neuberger Berman 450 19,674 North Fork Bancorporation 100 2,980 Protective Life 700 20,881 Radian Group 700 28,077 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- FINANCE (CONTINUED) T. Rowe Price Group 200 7,478 316,058 HEALTH TECHNOLOGY--10.8% Apogent Technologies 1,000 (a) 24,040 Barr Laboratories 300 (a) 25,122 Edwards Lifesciences 300 (a) 7,887 Genzyme--General Division 500 (a) 28,320 IDEC Pharmaceuticals 400 (a) 23,708 IVAX 900 (a) 30,294 Millennium Pharmaceuticals 200 (a) 5,500 Mylan Laboratories 200 6,598 Perrigo 800 (a) 12,912 STERIS 900 (a) 19,476 VISX 500 (a) 8,740 Vertex Pharmaceuticals 400 (a) 14,756 207,353 INDUSTRIAL SERVICES--3.8% BJ Services 1,100 (a) 24,673 Dycom Industries 500 (a) 7,245 Helmerich & Payne 500 15,280 Jacobs Engineering Group 100 (a) 5,862 Shaw Group 200 (a) 5,470 Smith International 200 (a) 9,280 Varco International 300 (a) 4,554 72,364 PROCESS INDUSTRIES--3.1% Albemarle 600 12,684 Pactiv 700 (a) 11,116 RPM 1,100 12,122 Schulman (A.) 900 12,411 Wausau-Mosinee Paper 900 11,304 59,637 COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- PRODUCER MANUFACTURING--6.4% American Standard Cos. 300 (a) 20,955 Harsco 600 21,240 Lear 300 (a) 10,872 Mettler-Toledo International 100 (a) 4,577 Pentair 300 11,250 Precision Castparts 400 13,736 SPX 200 (a) 23,250 Stewart & Stevenson Services 100 2,746 York International 400 15,200 123,826 RETAIL TRADE--2.9% Abercrombie & Fitch, Cl. A 100 (a) 3,034 American Eagle Outfitters 600 (a) 15,450 AutoNation 800 (a) 8,608 BJ's Wholesale Club 200 (a) 9,800 Circuit City Stores-Circuit City Group 400 6,680 Dollar Tree Stores 200 (a) 4,746 Rite Aid 800 (a) 6,352 54,670 TECHNOLOGY SERVICES--11.9% Affiliated Computer Services 100 (a) 8,177 CSG Systems International 200 (a) 9,180 Cadence Design Systems 800 (a) 17,584 DST Systems 500 (a) 23,925 EarthLink 300 (a) 4,053 Express Scripts 500 (a) 26,760 First Health Group 300 (a) 8,400 Health Net 1,100 (a) 20,757 Network Associates 600 (a) 9,510 Omnicare 400 9,568 Oxford Health Plans 900 (a) 26,982 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY SERVICES (CONTINUED) Quest Diagnostics 100 (a) 6,265 RSA Security 200 (a) 3,848 Retek 400 (a) 11,192 Reynolds & Reynolds, Cl. A 1,000 24,900 Sykes Enterprises 900 (a) 8,334 Symantec 200 (a) 8,598 228,033 TRANSPORTATION--2.1% Overseas Shipholding Group 800 21,808 Tidewater 600 18,666 40,474 UTILITIES--7.4% AGL Resources 1,000 21,300 Black Hills 500 15,875 MDU Resources Group 600 17,088 Potomac Electric Power 1,100 24,739 Public Service Company of New Mexico 500 14,200 Puget Energy 800 19,824 UtiliCorp United 900 28,944 141,970 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $1,939,566) 96.6% 1,857,746 CASH AND RECEIVABLES (NET) 3.4% 65,548 NET ASSETS 100.0% 1,923,294 (A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF ASSETS AND LIABILITIES August 31, 2001 Cost Value ------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 1,939,566 1,857,746 Cash 23,224 Dividends receivable 1,804 Prepaid expenses 47,939 Due from The Dreyfus Corporation 10,969 1,941,682 ------------------------------------------------------------------------------- LIABILITIES ($): ACCRUED EXPENSES 18,388 ------------------------------------------------------------------------------- NET ASSETS ($) 1,923,294 ------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 2,027,353 Accumulated undistributed investment income--net 9,978 Accumulated net realized gain (loss) on investments (32,217) Accumulated net unrealized appreciation (depreciation) on investments--Note 3 (81,820) ------------------------------------------------------------------------------- NET ASSETS ($) 1,923,294 NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T ----------------------------------------------------------------------------------------------------------------------------------- Net Assets ($) 660,485 659,552 225,845 188,777 188,635 Shares Outstanding 56,000 56,000 19,177 16,000 16,000 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ($) 11.79 11.78 11.78 11.80 11.79
SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS From June 29, 2001 (commencement of operations) to August 31, 2001 ------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends 4,048 Interest 1,559 TOTAL INCOME 5,607 EXPENSES: Management fee--Note 2(a) 2,556 Auditing fees 15,000 Registration fees 9,908 Custodian fees--Note 2(c) 1,741 Prospectus and shareholders' reports 1,390 Distribution fees--Note 2(b) 1,238 Shareholder servicing costs--Note 2(c) 976 Legal fees 250 Directors' fees and expenses--Note 2(d) 115 Miscellaneous 100 TOTAL EXPENSES 33,274 Less- expense reimbursement from The Dreyfus Corporation due to undertaking--Note 2(a) (27,009) NET EXPENSES 6,265 INVESTMENT (LOSS) (658) ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($): Net realized gain (loss) on investments (32,217) Net unrealized appreciation (depreciation) on investments (81,820) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (114,037) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (114,695) SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS From June 29, 2001 (commencement of operations) to August 31, 2001 ------------------------------------------------------------------------------- OPERATIONS ($): Investment (loss) (658) Net realized gain (loss) on investments (32,217) Net unrealized appreciation (depreciation) on investments (81,820) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (114,695) ------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 700,000 Class B shares 700,000 Class C shares 237,989 Class R shares 200,000 Class T shares 200,000 INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 2,037,989 TOTAL INCREASE (DECREASE) IN NET ASSETS 1,923,294 ------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period -- END OF PERIOD 1,923,294 Undistributed investment income--net 9,978 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) From June 29, 2001 (commencement of operations) to August 31, 2001 ------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A SHARES SOLD 56,000 ------------------------------------------------------------------------------- CLASS B SHARES SOLD 56,000 ------------------------------------------------------------------------------- CLASS C SHARES SOLD 19,177 ------------------------------------------------------------------------------- CLASS R SHARES SOLD 16,000 ------------------------------------------------------------------------------- CLASS T SHARES SOLD 16,000 SEE NOTES TO FINANCIAL STATEMENTS. FINANCIAL HIGHLIGHTS The following table describes the performance for each share class for the period from June 29, 2001(commencement of operations) to August 31, 2001. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during the period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements.
Class A Class B Class C Class R Class T Shares Shares Shares Shares Shares ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 12.50 12.50 12.50 12.50 12.50 Investment Operations: Investment income (loss)--net (a) .00(b) (.01) (.01) .01 (.00)(b) Net realized and unrealized gain (loss)on investments (.71) (.71) (.71) (.71) (.71) Total from Investment Operations (.71) (.72) (.72) (.70) (.71) Net asset value, end of period 11.79 11.78 11.78 11.80 11.79 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (D) (5.68)(c) (5.76)(c) (5.76)(c) (5.60) (5.68)(c) ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets (d) .26 .39 .40 .22 .31 Ratio of net investment income (loss) to average net assets (d) .03 (.11) (.11) .07 (.02) Decrease reflected in above expense ratios due to undertaking by The Dreyfus Corporation (d) 1.39 1.39 1.39 1.39 1.39 Portfolio Turnover Rate (d) 24.76 24.76 24.76 24.76 24.76 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 660 660 226 189 189 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Premier Structured Mid Cap 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 eleven series, including the fund, which commenced operations on June 29, 2001. The fund's investment objective is capital growth. The Dreyfus Corporation (" Dreyfus" ) serves as the fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Financial Corporation. Franklin Portfolio Associates, LLC (" Franklin Portfolio" ), an affiliate of Dreyfus, serves as the fund' s sub-investment adviser. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund's shares. The fund is authorized to issue 500 million shares of $.001 par value Common Stock. The fund currently offers five classes of shares: Class A (100 million shares authorized) , Class B (100 million shares authorized), Class C (100 million shares authorized), Class R (100 million shares authorized) and Class T (100 million shares authorized) . Class A and Class T shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge ("CDSC") imposed on Class B share redemptions made within six years of purchase, Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase and Class R shares are sold at net asset value per share only to institutional investors. Class B shares automatically convert to Class A shares after six years. Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. As of August 31, 2001, MBC Investment Corp., an indirect subsidiary of Mellon Financial Corporation, held 16,000 Class C shares and all of the outstanding Class A, Class B, Class R and Class T shares of the fund. 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 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 amounts of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including amortization of discount and premium on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund received net earnings credits of $262 during the period ended August 31, 2001 based on available cash balances left on deposit. Income 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, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code 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. During the period ended August 31, 2001, as a result of permanent book to tax differences, the fund increased accumulated undistributed investment income-net by $10,636 and decreased paid-in capital by the same amount. Net assets were not affected by this reclassification. NOTE 2--Management Fee and Other Transactions With Affiliates: (A) Pursuant to a management agreement with Dreyfus, 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. Dreyfus has undertaken from June 29, 2001 through August 31, 2002 to reduce the management fee paid by or reimburse such excess expenses of the fund, to the extent that the fund's aggregate expenses, exclusive of taxes, brokerage fees, interest on borrowings, Distribution Plan fees, Shareholder Services Plan fees and extraordinary expenses, exceed an annual rate of 1.25% of the value of the fund's average daily net assets. The expense reimbursement, pursuant to the undertaking, amounted to $27,009 during the period ended August 31, 2001. Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Franklin Portfolio, the sub-investment advisory fee is payable monthly by Dreyfus, and is based upon the value of the fund's average daily net assets, computed at the following annual rates: AVERAGE NET ASSETS 0 to $100 million. . . . . . . . . . . . . . . . . .25 of 1% In excess of $100 million to $1 billion. . . . . . .20 of 1% In excess of $1 billion to $1.5 billion. . . . . . .16 of 1% In excess of $1.5 billion. . . . . . . . . . . . . .10 of 1% (B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B, Class C and Class T shares pay the Distributor for distributing their shares at an annual rate of .75 of 1% of the value of the average daily net assets of Class B and Class C shares and .25 of 1% of the value of the average daily net assets of Class T shares. During the period ended August 31, 2001, Class B, Class C and Class T shares were charged $892, $261 and $85 respectively, pursuant to the Plan. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (C) Under the Shareholder Services Plan, Class A, Class B, Class C and Class T shares pay the Distributor at an annual rate of .25 of 1% of the value of their 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 industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2001, Class A, Class B, Class C and Class T shares were charged $298, $297, $87 and $85, respectively, pursuant to the Shareholder Services Plan. The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended August 31, 2001, the fund was charged $9 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 August 31, 2001, the fund was charged $1,741 pursuant to the custody agreement. (D) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). 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 in person meeting 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. Subject to the Company'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. NOTE 3--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2001, amounted to $2,280,464 and $308,804, respectively. At August 31, 2001, accumulated net unrealized depreciation on investments was $81,820, consisting of $56,856 gross unrealized appreciation and $138,676 gross unrealized depreciation. At August 31, 2001, 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 REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus Premier Structured Mid Cap Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Premier Structured Mid Cap Fund (one of the Series comprising Dreyfus Growth and Value Fund, Inc.) as of August 31, 2001, and the related statements of operations, changes in net assets and financial highlights for the period from June 29, 2001 (commencement of operations) to August 31, 2001. 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 audit. We conducted our audit 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 August 31, 2001 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 audit provides 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 Premier Structured Mid Cap Fund at August 31, 2001, and the results of its operations, the changes in its net assets and the financial highlights for the period from June 29, 2001 to August 31, 2001, in conformity with accounting principles generally accepted in the United States. New York, New York October 12, 2001 NOTES For More Information Dreyfus Premier Structured Mid Cap Fund 200 Park Avenue New York, NY 10166 Investment Adviser The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Sub-Investment Adviser Franklin Portfolio Associates, LLC One Boston Place Boston, MA 02108 Custodian Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call your financial representative or 1-800-554-4611 BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 (c) 2001 Dreyfus Service Corporation 936AR0801 EX-99 3 graphs-250.txt GRAPH IN PRESIDENT'S LETTER OF THE ANNUAL REPORT Comparison of change in value of $10,000 investment in Dreyfus Aggressive Growth Fund and the Standard & Poor's 500 Composite Stock Price Index EXHIBIT A: Standard & Poor's 500 PERIOD Dreyfus Aggressive Composite Stock Growth Fund Price Index * 9/29/95 10,000 10,000 8/31/96 18,168 11,391 8/31/97 16,056 16,018 8/31/98 6,848 17,319 8/31/99 8,672 24,213 8/31/00 12,632 28,162 8/31/01 6,968 21,298 * Source: Lipper Inc. _____________________ Comparison of change in value of $10,000 investment in Dreyfus Emerging Leaders Fund and the Russsell 2000 Index EXHIBIT A: PERIOD Dreyfus Emerging Russsell 2000 Leaders Fund Index * 9/29/95 10,000 10,000 8/31/96 14,609 10,888 8/31/97 21,103 14,041 8/31/98 18,820 11,317 8/31/99 28,333 14,527 8/31/00 37,987 18,471 8/31/01 34,264 16,323 * Source: Lipper Inc. _____________________ Comparison of change in value of $10,000 investment in Dreyfus International Value Fund and the Morgan Stanley Capital International Europe, Australasia, Far East (EAFE(R)) Index EXHIBIT A: Morgan Stanley PERIOD Dreyfus Capital International International Europe, Australasia, Value Fund Far East (EAFE(R)) Index * 9/29/95 10,000 10,000 8/31/96 10,643 10,580 8/31/97 12,317 11,537 8/31/98 12,240 11,521 8/31/99 15,690 14,479 8/31/00 16,237 15,862 8/31/01 14,902 12,000 * Source: Lipper Inc. _____________________ Comparison of change in value of $10,000 investment in Dreyfus Midcap Value Fund and the Russsell Midcap Value Index EXHIBIT A: PERIOD Dreyfus Midcap Russsell Midcap Value Fund Value Index * 9/29/95 10,000 10,000 8/31/96 12,688 11,165 8/31/97 19,724 15,285 8/31/98 14,335 14,770 8/31/99 22,321 18,000 8/31/00 30,713 19,127 8/31/01 32,869 21,339 * Source: Lipper Inc. ____________________ Comparison of change in value of $10,000 investment in Dreyfus Large Company Value Fund and the Russell 1000 Value Index EXHIBIT A: Dreyfus Russell PERIOD Large Company 1000 Value Value Fund Index * 12/29/93 10,000 10,000 8/31/94 10,464 10,299 8/31/95 12,375 12,274 8/31/96 16,047 14,427 8/31/97 21,896 20,132 8/31/98 19,452 20,915 8/31/99 24,741 27,206 8/31/00 27,208 28,336 8/31/01 25,315 28,019 * Source: Lipper Inc. ______________________ Comparison of change in value of $10,000 investment in Dreyfus Small Company Value Fund and the Russell 2000 Value Index EXHIBIT A: Dreyfus Russell PERIOD Small Company 2000 Value Value Fund Index * 12/29/93 10,000 10,000 8/31/94 9,984 10,254 8/31/95 12,182 11,853 8/31/96 15,669 13,289 8/31/97 22,916 18,261 8/31/98 16,651 16,077 8/31/99 23,547 18,340 8/31/00 28,639 20,852 8/31/01 31,816 24,614 * Source: Lipper Inc. ______________________ Comparison of change in value of $10,000 investment in Dreyfus Premier Technology Growth Fund Class A shares with the Morgan Stanley High Technology 35 Index and the Standard & Poor's 500 Composite Stock Price Index EXHIBIT A: Dreyfus Premier PERIOD Technology Morgan Stanley Standard & Poor's 500 Growth Fund High Technolog Composite Stock (Class A shares) 35 Index * Price Index ** 10/13/97 9,427 10,000 10,000 8/31/98 9,133 9,254 10,251 8/31/99 24,405 23,090 14,332 8/31/00 51,425 43,252 16,669 8/31/01 17,200 18,595 12,605 * Source: Bloomberg L.P. ______________________ Comparison of change in value of $10,000 investment in Dreyfus Premier Future Leaders Fund Class A shares and the Russell 2000 Index EXHIBIT A: Dreyfus Premier Russell PERIOD Future Leaders Fund 2000 (Class A shares) Index * 6/30/00 9,427 10,000 8/31/00 10,799 10,417 11/30/00 9,796 8,668 2/28/01 10,988 9,253 5/31/01 11,946 9,721 8/31/01 11,048 9,205 * Source: Lipper Inc. _____________________ Comparison of change in value of $10,000 investment in Dreyfus Premier Strategic Value Fund Class A shares with the Russsell Midcap Value Index and the Russsell 1000 Value Index EXHIBIT A: Dreyfus Premier PERIOD Strategic Value Fund Russsell Midcap Russsell 1000 (Class A shares) Value Index * Value Index * 9/29/95 9,427 10,000 10,000 8/31/96 15,177 11,165 11,344 8/31/97 21,789 15,285 15,829 8/31/98 18,081 14,770 16,445 8/31/99 22,675 18,000 21,392 8/31/00 29,677 19,127 22,280 8/31/01 27,487 21,339 22,031 * Source: Lipper Inc.