-----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, HJRv3e7nabtc+xfAdH5q84UXnGnRVLFIf30KMY7aTu7IM8+hNuLrTb8FQ1rrW6O2 2OBgcHtKJg6zFfUpMIR6LQ== 0000885409-99-000003.txt : 19990427 0000885409-99-000003.hdr.sgml : 19990427 ACCESSION NUMBER: 0000885409-99-000003 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990228 FILED AS OF DATE: 19990426 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: 99600711 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 ANNUAL REPORT YEAR 2000 ISSUES (UNAUDITED) The fund could be adversely affected if the computer systems used by The Dreyfus Corporation and the fund' s other service providers do not properly process and calculate date-related information from and after January 1, 2000. The Dreyfus Corporation is working to avoid Year 2000-related problems in its systems and to obtain assurances from other service providers that they are taking similar steps. In addition, issuers of securities in which the fund invests may be adversely affected by Year 2000-related problems. This could have an impact on the value of the fund's investments and its share price. DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to report the performance for Dreyfus BASIC Money Market Fund, Inc. for the 12-month period ended February 28, 1999. For the period, your fund produced an annualized yield of 5.08% and, after taking into account the effect of compounding, an annualized effective yield of 5.20%.* ECONOMIC REVIEW The American economy in the period ended February 28, 1999 had several persistent themes. These included weakness in the world economy, strength in the U.S., pervasive disinflation and action by central banks to lower interest rates in many parts of the world. Weakness in the world economy started in Asia with economic and financial stresses throughout most of that continent. While China was able to generate economic expansion by government spending, economic declines occurred in most of the rest of Asia. The most severe phase occurred when Asian currencies dropped and short-term interest rates rose. Tentative signs of a bottoming of the crises in Asia had emerged by the end of your fund's fiscal year. However, Latin America had begun to weaken in the aftermath of Brazilian economic weakness. Europe was full of optimism about the benefits of currency unification into the Euro as of year-end 1998. The reality was that economic growth in Europe began 1998 at a modest pace and showed signs of stagnation by year-end. Even so, the new European central bank postponed any reduction in interest rates in early 1999, probably because of a desire to build anti-inflationary credibility. The U.S. economy over the last year grew at an impressively high rate despite the economic weakness overseas. A major reason for this was that the negative effects of foreign economic weakness on the traditional industrial sector were offset by positive effects elsewhere in the economy. Low inflation and low interest rates stimulated the housing and consumer sectors, while the technology sector continued to expand. The Federal Reserve Board eased monetary policy three times beginning on September 30, 1998, lowering the Federal Funds rate from 5.50% to 4.75%. This was not because of any shortfall in U.S. economic growth. Rather, it was a response to the financial stresses that started with the Russian default in the summer of 1998 and culminated in the liquidity crisis of an overleveraged hedge fund in the September/October period. Despite widespread fears, the U.S. economy never did slow. Long-term interest rates declined into early October, when fears of financial crisis, deflation and possible economic recession were at their greatest. However, long-term rates then drifted higher as the financial stresses eased and the feared economic slowdown did not materialize. THE MARKET ENVIRONMENT/PORTFOLIO FOCUS The economic forces described above drove down interest rates in late summer and early fall. Later in the year, there was a modest increase in rates. One of its effects was to change the yield curve back to a more normal pattern in which longer term yields exceed those of shorter term instruments. A flight to safety by global investors was the force that most affected the U.S. money market. More recently, as the domestic economy continued to demonstrate exceptional strength in spite of turmoil abroad, rates edged higher. One factor affecting the U.S. interest rates has been the rise in interest rates in Japan. This has brought about some repatriation of investment funds to that country. In addition, the introduction of the Euro currency at the start of the new year, which was initially well received, put some downward pressure on the U.S. dollar and, conversely, upward pressure on yields. Generally, the main influences now on short-term rates seem to be underlying economic factors rather than the fear that gripped many investors last fall. With the domestic economy continuing to expand without visible inflationary pressures, the Federal Reserve appears to be in a wait-and-see mode, with no immediate plans for major policy changes. As long as this scenario continues, the money market should remain stable. Therefore, in an attempt to maximize yields, we will continue to maintain an average portfolio maturity longer than the industry average. As always, we will maintain a close watch on market developments in case some adjustments are required in our investment strategies. Very truly yours, [Patricia A. Larkin signature] Patricia A. Larkin Senior Portfolio Manager March 18, 1999 New York, N.Y. * Annualized effective yield is based upon dividends declared daily and reinvested monthly. There is no assurance that a money market fund will be able to maintain a stable net asset value of $1.00 per share. Yield fluctuates. DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS FEBRUARY 28, 1999 Principal Negotiable Bank Certificates of Deposit--22.6% Amount Value - ------------------------------------------------------- ______________ ______________ Abbey National Treasury Service (Yankee) 5.20%, 12/9/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000 $ 15,000,000 ABN-AMRO Bank N.V. 5.01%, 11/17/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,986,201 Bank Austria AG 5.13%, 2/18/2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000,000 39,985,047 Bayerische Landesbank 5.75%, 5/6/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,997,221 Credit Agricole Indosuez S.A. (Yankee) 4.87%-5.80%, 5/21/1999-5/26/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 45,000,000 44,992,340 Credit Suisse 5%, 3/17/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,001,135 Deutsche Bank AG (Yankee) 5.14%-5.73%, 3/9/1999-2/22/2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000,000 74,985,559 Istituto Bancario San Paolo DiTorino (Yankee) 5.75%, 7/20/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,994,454 Societe Generale (Yankee) 5.76%-5.84%, 4/6/1999-5/28/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000,000 79,990,582 SwedBank (Yankee) 5.73%-5.79%, 3/26/1999-6/14/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000,000 54,997,684 _______________ TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (cost $414,930,223) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 414,930,223 _______________ Commerical Paper--36.7% - ------------------------------------------------------- Associated Corp. of North America 4.80%, 3/1/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000 $ 50,000,000 BankAmerica Corp. 5.10%, 5/13/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,748,049 Canadian Imperial Holdings Inc. 5.04%, 6/28/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,187,660 Chrysler Financial Co. LLC 4.96%-5.01%, 4/13/1999-4/16/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,000,000 81,504,019 Den Danske Corp. Inc. 4.95%, 8/25/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,406,313 Den Norske Bank ASA 4.89%-4.91%, 7/7/1999-7/14/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000,000 68,765,066 Equilon Enterprises LLC 5.16%, 3/25/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,915,167 Fina Oil & Chemical Co. 4.98%, 4/12/1999 (b,c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,942,600 Finova Capital Corp. 5.39%, 3/19/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 19,947,000 DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 Principal Commercial Paper (continued) Amount Value - ------------------------------------------------------- ______________ ______________ General Electric Capital Corp. 5.23%, 3/19/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000 $ 14,961,450 General Electric Capital Services Inc. 5%-5.05%, 4/21/1999-5/12/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000,000 34,698,275 Goldman Sachs Group L.P. 5.01%, 5/28/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,880,222 Hertz Corp. 4.91%-5.07%, 5/14/1999-6/18/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000,000 78,954,289 Lehman Brothers Holdings, Inc. 5.40%, 8/5/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 48,853,028 Morgan (J.P.) & Co. 4.91%, 4/21/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,660,708 Spintab AB 5.08%-5.09%, 6/22/1999-6/30/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,195,653 Swedbank Inc. 5.09%, 4/13/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000,000 34,792,644 _______________ TOTAL COMMERCIAL PAPER (cost $674,412,143) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 674,412,143 _______________ Corporate Notes--19.9% - ------------------------------------------------------- Bankers Trust N.Y. Co. 4.87%, 4/9/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,000,000 $ 29,998,762 Bear Stearns Companies Inc. 4.85%-5.02%, 4/16/1999-2/22/2000 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 46,000,000 46,011,209 CIT Group Holdings, Inc. 4.88%-4.97%, 9/29/1999-11/2/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 70,000,000 69,986,018 Heller Financial Inc. 5%, 9/8/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000,000 35,000,000 Istituto Bancario San Paolo DiTorino 4.88%, 4/19/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,997,079 Merrill Lynch & Co. Inc. 4.87%, 4/19/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000 PNC Bank N.A. 4.86%, 6/11/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000,000 79,984,351 Paine Webber Group Inc. 4.95%, 4/22/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000 Salomon Smith Barney Holdings Inc. 4.86%, 4/19/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000,000 40,000,000 _______________ TOTAL CORPORATE NOTES (cost $365,977,419) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 365,977,419 _______________ DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1999 Principal Promissory Notes--3.8% Amount Value - ------------------------------------------------------- ______________ ______________ Goldman Sachs Group L.P. 5.06%-5.11%, 7/29/1999-11/9/1999 (b,c) (cost $70,000,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,000,000 $ 70,000,000 _______________ Short-Term Bank Notes--10.7% - ------------------------------------------------------- Abbey National PLC 5.80%, 6/11/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000 $ 4,998,930 Bank of America NT & SA 5.13%, 3/29/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 20,000,000 BankBoston N.A. 5.64%, 4/16/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,999,459 Key Bank N.A. 4.92%-5.17%, 10/15/1999-3/24/2000 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 86,000,000 86,007,140 LaSalle National Bank 5.23%, 3/17/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000,000 35,000,000 South Trust N.A. 4.86%, 7/6/1999 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 24,994,905 _______________ TOTAL SHORT-TERM BANK NOTES (cost $196,000,434) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 196,000,434 _______________ Time Deposits--4.8% - ------------------------------------------------------- Berliner Handels und Frankforter Bank (Grand Cayman) 4.85%, 3/1/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000 $ 50,000,000 Republic National Bank of New York (London) 4.81%, 3/1/1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,384,000 38,384,000 _______________ TOTAL TIME DEPOSITS (cost $88,384,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 88,384,000 _______________ TOTAL INVESTMENTS (cost $1,809,704,219). . . . . . . . . . . . . . . . . . . . . 98.5% $1,809,704,219 _______ _______________ CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5% $ 27,959,938 _______ _______________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $1,837,664,157 _______ _______________ Notes to Statement of Investments: - ----------------------------------------------------------------------------- (a) Variable interest rate-subject to periodic change. (b) These notes were acquired for investment, not with the intent to distribute or sell. (c) Securities restricted as to public resale. These securities were acquired from 11/5/98-2/12/99 at a cost of $9,878,367 for Fina Oil & Chemical Co. and $70,000,000 for Goldman Sachs Group L.P. At February 28,1999, the aggregate value of these securities is $79,942,600 representing approximately 4.35% of net assets and are valued at amortized cost. SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1999 Cost Value _______________ _______________ ASSETS: Investments in securities--See Statement of Investments . . $1,809,704,219 $1,809,704,219 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 10,345,290 Interest receivable . . . . . . . . . . . . . . . . . . . 18,485,148 _______________ 1,838,534,657 _______________ LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 439,664 Accrued expenses . . . . . . . . . . . . . . . . . . . . 430,836 _______________ 870,500 _______________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,837,664,157 _______________ REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $1,837,774,031 Accumulated undistributed investment income--net . . . . 466,281 Accumulated net realized gain (loss) on investments . . . (576,155) _______________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,837,664,157 _______________ SHARES OUTSTANDING (3 billion shares of $.001 par value Common Stock authorized). . . . . . . . . . . . . . . 1,837,774,031 NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $1.00 ______ SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1999 INVESTMENT INCOME INCOME Interest Income . . . . . . . . . . . . . . . . . $99,114,363 EXPENSES: Management fee--Note 2(a) . . . . . . . . . . . . $ 8,958,381 Shareholder servicing costs--Note 2(b) . . . . . 1,055,882 Registration fees . . . . . . . . . . . . . . . . 133,381 Custodian fees . . . . . . . . . . . . . . . . . 128,192 Professional fees . . . . . . . . . . . . . . . . 48,123 Prospectus and shareholders' reports . . . . . . 35,099 Directors' fees and expenses--Note 2(c) . . . . . 24,869 Miscellaneous . . . . . . . . . . . . . . . . . . 20,315 ___________ Total Expenses . . . . . . . . . . . . 10,404,242 Less--reduction in management fee due to undertaking--Note 2(a) . . . . . . . . . . . . (2,340,179) ___________ Net Expenses . . . . . . . . . . . . . 8,064,063 ____________ INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,050,300 NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . (10,215) ____________ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $91,040,085 ____________ ____________ SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS Year Ended Year Ended February 28, 1999 February 28, 1998 __________________ __________________ OPERATIONS: Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 91,050,300 $ 93,230,366 Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . (10,215) (74,821) __________________ __________________ Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 91,040,085 93,155,545 __________________ __________________ DIVIDENDS TO SHAREHOLDERS FROM: Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,832,870) (92,981,515) __________________ __________________ CAPITAL STOCK TRANSACTIONS ($1.00 per share): Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 1,895,302,928 2,048,718,827 Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,757,851 87,421,489 Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,868,574,753) (2,205,335,475) __________________ __________________ Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 112,486,026 (69,195,159) __________________ __________________ Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 112,693,241 (69,021,129) NET ASSETS: Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,724,970,916 1,793,992,045 __________________ __________________ End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,837,664,157 $1,724,970,916 __________________ __________________ Undistributed investment income--net . . . . . . . . . . . . . . . . . . . . . . $ 466,281 $ 248,851 __________________ __________________ SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Common Stock outstanding, total investment return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from the Fund's financial statements. Fiscal Year Ended February, ___________________________________________________________ PER SHARE DATA: 1999 1998 1997 1996 1995 ______ ______ ______ ______ ______ Net asset value, beginning of period . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ______ ______ ______ ______ ______ Investment Operations: Investment income--net . . . . . . . . . . . . . . . .051 .053 .051 .058 .046 ______ ______ ______ ______ ______ Distributions: Dividends from investment income--net . . . . . . . . (.051) (.053) (.051) (.058) (.046) ______ ______ ______ ______ ______ Net asset value, end of period . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ______ ______ ______ ______ ______ TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . 5.19% 5.38% 5.19% 5.97% 4.73% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets . . . . . 45% .45% .45% .31% .18% Ratio of net investment income to average net assets . . . . . . . . . . . . . . . 5.08% 5.28% 5.08% 5.82% 4.70% Decrease reflected in above expense ratios due to undertakings by the Manager . . . . . . . . .13% .24% .23% .31% .46% Net Assets, end of period (000's Omitted) . . . . $1,837,664 $1,724,971 $1,793,992 $2,098,292 $1,623,242 SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- 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. Premier Mutual Fund Services, Inc. is the distributor of the Fund's shares, which are sold to the public without a sales charge. 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 generally accepted accounting principles which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (A) PORTFOLIO VALUATION: Investments in securities 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 received net earnings credits of $20,740 during the period ended February 28, 1999 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. (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, 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. On March 1, 1999, the Fund declared a cash dividend of approximately $.0003 per share from undistributed investment income-net which includes investment income-net for Saturday, February 27, 1999 and Sunday, February 28, 1999. (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 $576,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to February 28, 1999. If not applied, $90,000 of the carryover expires in fiscal 2002, $126,000 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, 1999, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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, 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 $2,340,179 during the period ended February 28, 1999. (B) Under the Shareholder Services Plan, the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, 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, 1999, the Fund was charged $550,109 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, 1999, the Fund was charged $299,201 pursuant to the transfer agency agreement. (C) Each director who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $1,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. DREYFUS BASIC MONEY MARKET FUND, INC. - ----------------------------------------------------------------------------- REPORT OF ERNST & YOUNG LLP, 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, 1999, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund' s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of February 28, 1999 by correspondence with the custodian. 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, 1999, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. New York, New York March 30, 1999 [This page intentionally leftr blank.] [reg.tm logo] (reg.tm) 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 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Printed in U.S.A. 123AR992 BASIC Money Market Fund, Inc. Annual Report February 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----