-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KOiK7QoJP6FFq1aoQJbCWVezYGjlnd1xQ1oJ3hcncglvNj4DYvGx4zlZb6EJeh5d 1M8G/Zs+/qgtGDX9DW9XAA== 0000885409-01-500002.txt : 20010424 0000885409-01-500002.hdr.sgml : 20010424 ACCESSION NUMBER: 0000885409-01-500002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS BASIC MONEY MARKET FUND INC CENTRAL INDEX KEY: 0000885409 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133662299 STATE OF INCORPORATION: MD FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06604 FILM NUMBER: 1607097 BUSINESS ADDRESS: STREET 1: 144 GLENN CURTISS BLVD STREET 2: C/O DREYFUS CORP CITY: UNIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226130 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS INVESTORS MONEY MARKET FUND INC DATE OF NAME CHANGE: 19600201 N-30D 1 pn30d-123.txt ANNUAL REPORT TO SHAREHOLDERS Dreyfus BASIC Money Market Fund, Inc. ANNUAL REPORT February 28, 2001 (reg.tm) The views expressed herein are current to the date of this report. These views and the composition of the fund's portfolio are subject to change at any time based on market and other conditions. * Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND - -------------------------------------------------- 2 Letter from the President 3 Discussion of Fund Performance 6 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 16 Report of Independent Auditors FOR MORE INFORMATION - --------------------------------------------------------------------------- Back Cover The Fund Dreyfus BASIC Money Market Fund, Inc. LETTER FROM THE PRESIDENT Dear Shareholder: We are pleased to present this annual report for Dreyfus BASIC Money Market Fund, Inc., covering the 12-month period from March 1, 2000 through February 28, 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, Thomas S. Riordan. Money market funds were particularly valuable investments over the 12-month reporting period because of their ability to protect capital while many longer term asset prices declined. The overall stock market, as measured by the Standard & Poor's 500 Composite Stock Price Index, declined more than 8% during the 12-month reporting period. Many other major stock market indices declined as well. The reasons for the lackluster equity performance ranged from an ongoing correction in technology share valuations to slower economic growth. Times of economic and market changes are often good opportunities to review your investment strategies. Recent market events and conditions may have altered the way your investments are apportioned among various asset classes, market-capitalization ranges and investment styles. You may wish to consider rebalancing your portfolio to help achieve your long-term financial goals. We encourage you to contact your financial advisor for more information about ways to refine your investment strategies in the current environment. To speak with a Dreyfus customer service representative call 1-800-782-6620, or visit our website at www.dreyfus.com. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter President and Chief Investment Officer The Dreyfus Corporation March 15, 2001 DISCUSSION OF FUND PERFORMANCE Thomas S. Riordan, Portfolio Manager How did Dreyfus BASIC Money Market Fund, Inc. perform during the period? For the 12-month period ended February 28, 2001, the fund produced a yield of 6.05% , and taking into account the effects of compounding, created an effective yield of 6.23%.(1) What is the fund's investment approach? When managing the fund, we closely monitor the outlook for economic growth and inflation, follow overseas developments and consider the posture of the Federal Reserve Board (the "Fed") in our decision as to how to structure the fund. Based upon our economic outlook, we actively manage the fund's average maturity in looking for opportunities that may present themselves in light of possible changes in interest rates. The fund invests in a broad range of high quality, short-term money market instruments, including U.S. Government securities, short-term bank obligations, U.S. dollar-denominated foreign and domestic commercial paper, repurchase agreements and U.S. dollar-denominated obligations of foreign governments. Normally, the fund invests at least 25% of its net assets in bank obligations. What other factors influenced the fund's performance? The U.S. economy was growing strongly when the reporting period began, fueling inflation concerns. The Fed had already taken steps to relieve inflationary pressures by increasing short-term interest rates several times before the beginning of the reporting period. The Fed again raised interest rates in March 2000 by 25 basis points and by 50 basis points in May. Money market instruments reacted to these interest-rate hikes in the form of higher yields. In the April through June quarter, economic growth rose to a torrid 5.6%. In July, however, we began to see signs that the Fed's interest-rate hikes were having the desired effect of slowing the economy. Third- The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) quarter 2000 Gross Domestic Product ("GDP") slowed to a growth rate of approximately 2.2%, and fourth quarter GDP declined to an anemic 1.1%. The money markets responded to these developments with lower yields. The Fed held monetary policy steady, choosing not to raise rates further during 2000. However, at its December 2000 meeting, the Fed began to suggest that the greater threat facing the economy was recession, not inflation. As a result, many investors came to believe that the Fed's next move would be an interest-rate cut. Those expectations proved true when the Fed reduced interest rates by 50 basis points on January 3, 2001, between meetings of the Federal Open Market Committee. The Fed was apparently reacting to weak retail sales during the 2000 holiday season, diminishing consumer confidence and softening manufacturing activity, which were threatening to push the economy into recession. During the last week of January, the Fed cut interest rates by another 50 basis points. However, the market did not respond favorably to this news because money market yields had already reflected a significant rate reduction. In February, better than expected employment data also did little to reassure investors, who widely expected the Fed to reduce interest rates again at its meeting in March. In this environment, we generally maintained what we believe to be a relatively long weighted average maturity. This position was designed to maintain yields for as long as practical as interest rates declined. Although we reduced the fund' s weighted average maturity just prior to year-end 2000 to raise cash in anticipation of pressures that typically affect the money markets at the end of the year, we soon re-extended the fund' s weighted average maturity at the beginning of the new year. What is the fund's current strategy? We believe that interest rates may decline further if the Fed continues to cut the federal funds rate in an attempt to keep the economy out of recession. With concerns about inflation on the back burner, Federal Reserve Chairman Alan Greenspan has shown that he continues to be diligent about putting the growth rate back on track. By maintaining a relatively long weighted average maturity, we believe that the fund is currently positioned to benefit from further declines in short-term interest rates should that occur. March 15, 2001 (1) EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC OR THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND. The Fund STATEMENT OF INVESTMENTS February 28, 2001 STATEMENT OF INVESTMENTS Principal NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--41.3% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ ABN AMRO Bank N.V. (Yankee) 5.05%, 2/4/2002 25,000,000 24,997,755 Banca Commerciale Italiana (London) 6.70%, 3/12/2001 50,000,000 50,000,148 Bayerische Landesbank Girozentrale (Yankee) 5.66%, 8/7/2001 80,000,000 (a) 79,989,807 Citibank N.A. 5.93%, 7/9/2001 25,000,000 25,000,000 Citibank N.A. (London) 5.47%, 5/22/2001 50,000,000 50,000,000 Comerica Bank 5.41%, 1/22/2002 50,000,000 49,995,696 Commerzbank AG (Yankee) 5.18%, 2/19/2002 25,000,000 24,995,317 First Tennessee Bank N.A. 6.47%, 3/12/2001 66,000,000 66,000,000 Landesbank Hessen-Thueringen Girozentrale (London) 7.00%, 3/16/2001 50,000,000 50,000,198 Northern Trust Co. 5.54%, 4/9/2001 25,000,000 24,999,397 Societe Generale (London) 5.75%, 4/9/2001 25,000,000 25,000,267 Svenska Handelsbanken (Yankee) 5.09%-7.00%, 7/12/2001-2/11/2002 80,000,000 79,996,550 Swedbank (Yankee) 5.27%, 1/29/2002 75,000,000 75,000,000 Union Bank of California, N.A. 5.08%, 8/24/2001 30,000,000 30,000,000 Westdeutsche Landesbank Girozentrale (London) 7.01%, 3/16/2001 50,000,000 50,000,000 Wilmington Trust Co., DE 6.48%, 3/12/2001 60,000,000 60,000,181 TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (cost $765,975,316) 765,975,316 - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL PAPER--29.2% - ------------------------------------------------------------------------------------------------------------------------------------ Associates Corp. of North America 5.49%, 3/1/2001 90,000,000 90,000,000 Credit Suisse First Boston Inc. 6.54%, 5/4/2001 40,000,000 39,547,022 Principal COMMERCIAL PAPER (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ Donaldson, Lufkin & Jenrette Inc. 6.65%, 4/20/2001 35,000,000 34,685,486 General Electric Capital Corp. 6.75%, 3/7/2001 50,000,000 49,945,833 General Electric Capital Services Inc. 6.58%, 4/20/2001 20,000,000 19,822,222 Madison Funding Corp. 5.55%, 3/27/2001 53,450,000 53,236,913 Nationwide Building Society 4.85%-5.25%, 6/12/2001-8/1/2001 80,000,000 78,656,208 Philip Morris Cos. Inc. 6.68%, 5/29/2001 50,000,000 (b) 49,201,472 Santander Finance (DE) Inc. 5.47%-6.60%, 4/16/2001-4/30/2001 75,000,000 74,366,111 Sigma Finance Inc. 6.63%, 5/23/2001 53,133,000 (b) 52,346,543 TOTAL COMMERCIAL PAPER (cost $541,807,810) 541,807,810 - ------------------------------------------------------------------------------------------------------------------------------------ CORPORATE NOTES--10.6% - ------------------------------------------------------------------------------------------------------------------------------------ Bear Stearns Companies Inc. 5.64%, 4/12/2001 20,000,000 (a) 20,001,381 Merrill Lynch & Co. Inc. 5.35%, 3/28/2001 10,000,000 (a) 10,000,000 Morgan (J.P.) & Co. Inc. 5.67%, 3/6/2001 45,000,000 (a) 44,999,938 Morgan Stanley Dean Witter & Co. 5.67%, 3/19/2001 75,000,000 (a) 75,000,000 Sigma Finance Inc. 5.38%, 11/15/2001 25,000,000 (a) 25,004,641 Wells Fargo & Co. 5.63%, 10/12/2001 21,000,000 (a) 20,995,597 TOTAL CORPORATE NOTES (cost $196,001,557) 196,001,557 - ------------------------------------------------------------------------------------------------------------------------------------ PROMISSORY NOTES--4.6% - ------------------------------------------------------------------------------------------------------------------------------------ Goldman Sachs Group Inc. 5.04%-6.30%, 8/15/2001-8/24/2001 (cost $85,000,000) 85,000,000 (c) 85,000,000 The Fund STATEMENT OF INVESTMENTS (CONTINUED) Principal SHORT-TERM BANK NOTES--10.0% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ Bank One N.A. 5.18%, 1/25/2002 50,000,000 50,000,000 First Union National Bank 5.69%, 6/22/2001 25,000,000 (a) 24,999,226 Key Bank U.S.A., N.A. 5.66%, 5/11/2001-8/1/2001 85,000,000 (a) 85,000,000 U.S. Bank N.A. Minneapolis 5.79%, 5/11/2001 25,000,000 (a) 25,000,000 TOTAL SHORT-TERM BANK NOTES (cost $184,999,226) 184,999,226 - ------------------------------------------------------------------------------------------------------------------------------------ TIME DEPOSITS--4.7% - ------------------------------------------------------------------------------------------------------------------------------------ HSBC Bank (Nassau) 5.50%, 3/1/2001 18,067,000 18,067,000 State Street Bank & Trust Co. (Grand Cayman) 5.56%, 3/1/2001 70,000,000 70,000,000 TOTAL TIME DEPOSITS (cost $88,067,000) 88,067,000 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $1,861,850,909) 100.4% 1,861,850,909 LIABILITIES, LESS CASH AND RECEIVABLES (.4%) (6,916,239) NET ASSETS 100.0% 1,854,934,670 (A) VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE. (B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT FEBRUARY 28, 2001, THESE SECURITIES AMOUNTED TO $101,548,015 REPRESENTING APPROXIMATELY 5.5% OF NET ASSETS. (C) THESE NOTES WERE ACQUIRED FOR INVESTMENT, NOT WITH THE INTENT TO DISTRIBUTE OR SELL. SECURITIES RESTRICTED AS TO PUBLIC RESALE. THESE SECURITIES WERE ACQUIRED BETWEEN 12/19/2000 AND 2/27/2001 AT A COST OF $85,000,000. AT FEBRUARY 28, 2001, THE AGGREGATE VALUE OF THESE SECURITIES WAS $85,000,000 REPRESENTING APPROXIMATELY 4.6% OF NET ASSETS AND ARE VALUED AT AMORTIZED COST. SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES February 28, 2001 Cost Value - -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 1,861,850,909 1,861,850,90 Cash 1,960,493 Interest receivable 21,010,147 Prepaid expenses 30,375 1,884,851,924 - -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 340,158 Payable for investment securities purchased 29,394,375 Accrued expenses 182,721 29,917,254 - -------------------------------------------------------------------------------- NET ASSETS ($) 1,854,934,67 - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 1,855,360,888 Accumulated net realized gain (loss) on investments (426,218) - -------------------------------------------------------------------------------- NET ASSETS ($) 1,854,934,67 - -------------------------------------------------------------------------------- SHARES OUTSTANDING (3 billion shares of $.001 par value Common Stock authorized) 1,855,360,888 NET ASSET VALUE, offering and redemption price per share ($) 1.00 SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF OPERATIONS Year Ended February 28, 2001 - -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INTEREST INCOME 118,285,137 EXPENSES: Management fee--Note 2(a) 9,090,559 Shareholder servicing costs--Note 2(b) 1,736,608 Directors' fees and expenses--Note 2(c) 117,835 Custodian fees 111,493 Registration fees 44,259 Professional fees 43,236 Prospectus and shareholders' reports 43,110 Miscellaneous 8,365 TOTAL EXPENSES 11,195,465 Less--reduction in management fee due to undertaking--Note 2(a) (3,012,864) NET EXPENSES 8,182,601 INVESTMENT INCOME--NET 110,102,536 - -------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($): 149,937 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 110,252,473 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS Year Ended ------------------------------------ February 28, 2001 February 29, 2000 - -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 110,102,536 91,878,638 Net realized gain (loss) on investments 149,937 -- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 110,252,473 91,878,638 - -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): INVESTMENT INCOME--NET (110,102,536) (92,344,919) - -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($1.00 per share): Net proceeds from shares sold 1,437,033,955 1,964,474,102 Dividends reinvested 104,212,520 87,127,268 Cost of shares redeemed (1,600,079,653) (1,975,181,335) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (58,833,178) 76,420,035 TOTAL INCREASE (DECREASE) IN NET ASSETS (58,683,241) 75,953,754 - -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 1,913,617,911 1,837,664,157 END OF PERIOD 1,854,934,670 1,913,617,911 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. Fiscal Year Ended February, --------------------------------------------------------------------------- 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00 Investment Operations: Investment income--net .061 .050 .051 .053 .051 Distributions: Dividends from investment income--net (.061) (.050) (.051) (.053) (.051) Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) 6.23 5.10 5.19 5.38 5.19 - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .45 .45 .45 .45 .45 Ratio of net investment income to average net assets 6.06 4.98 5.08 5.28 5.08 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation .17 .15 .13 .24 .23 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 1,854,935 1,913,618 1,837,664 1,724,971 1,793,992 SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus BASIC Money Market Fund, Inc. (the "fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified open-end management investment company. The fund's investment objective is to provide investors with as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. 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. Effective March 22, 2000, Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, became the distributor of the fund's shares, which are sold to the public without a sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. It is the fund's policy to maintain a continuous net asset value per share of $1.00; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00. 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 are valued at amortized cost, which has been determined by the fund's Board of Directors to represent the fair value of the fund's investments. (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. Interest income is recognized on the accrual basis. Cost of investments represents amortized cost. 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) (c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. 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 an unused capital loss carryover of approximately $426,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to February 28, 2001. If not applied, $66,000 of the carryover expires in fiscal 2003, $57,000 expires in fiscal 2004, $209,000 expires in fiscal 2005, $84,000 expires in fiscal 2006 and $10,000 expires in fiscal 2007. At February 28, 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). NOTE 2--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 .50 of 1% of the value of the fund's average daily net assets and is payable monthly. The Manager has undertaken, until such time as it gives shareholders at least 90 days' notice to the contrary, to reduce the management fee paid by the fund, to the extent that the fund's aggregate annual expenses, exclusive of taxes, brokerage fees, interest on borrowings and extraordinary expenses, exceed an annual rate of .45 of 1% of the value of the fund' s average daily net assets. The reduction in management fee, pursuant to the undertaking, amounted to $3,012,864 during the period ended February 28, 2001. (b) Under the Shareholder Services Plan, the fund reimburses the Distributor an amount not to exceed an annual rate of .25 of 1% of the value of the fund's average daily net assets for certain allocated expenses of providing personal services and/or maintaining shareholder accounts. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended February 28, 2001, the fund was charged $1,374,282 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 February 28, 2001, the fund was charged $268,206 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"). Effective August 2, 2000, each Board member who is not an "affiliated person" as defined in the Act receives an annual fee of $25,000 and an attendance fee of $4,000 for each 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. Prior to August 2, 2000, each Board member who was not an "affiliated person" as defined in the Act received from the fund an annual fee of $1,500 and an attendance fee of $250 per meeting. The Chairman of the Board received an additional 25% of such compensation. Subject to the fund's Emeritus Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. The Fund REPORT OF INDEPENDENT AUDITORS Shareholders and Board of Directors Dreyfus BASIC Money Market Fund, Inc. We have audited the accompanying statement of assets and liabilities of Dreyfus BASIC Money Market Fund, Inc., including the statement of investments, as of February 28, 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 February 28, 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 BASIC Money Market Fund, Inc. at February 28, 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 April 4, 2001 For More Information Dreyfus BASIC Money Market Fund, Inc. 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, NY 10286 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call 1-800-645-6561 BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 BY E-MAIL Send your request to info@dreyfus.com ON THE INTERNET Information can be viewed online or downloaded from: http://www.dreyfus.com (c) 2001 Dreyfus Service Corporation 123AR0201 -----END PRIVACY-ENHANCED MESSAGE-----