PRESIDENT'S LETTER
Dear Shareholder:
For the six months ended November 30, 1993, Dreyfus Strategic
Governments Income, Inc. paid shareholders income dividends of $.47 per
share. In October, the continuing decline in global interest rates along
with greater fluctuations in global currency valuations led us to cut the
monthly dividend payout by $.005 per share to $.075.
Recent concerns regarding the acceleration of U.S. economic activity
and a potential jump in the U.S. inflation rate has led to an increase in U.S.
interest rates with the greatest pressure on the longer-maturity issues in
the market. Since the dollar-weighted average maturity of the holdings in
your Fund cannot exceed 10 years, your portfolio's net asset value per
share has been somewhat protected during this sell-off. (It should be
noted, however, that for the entire six-month period, longer-maturity
issues did show the best total returns, so that this recent change is more
of a catch-up for the shorter maturities). At this time, it is our judgment
that 1994 will see greater day-to-day price volatility and therefore we
may increase the turnover rate in your portfolio, especially in U.S.
Treasury holdings, to take advantage of this.
In the nondollar markets, we have also seen greater day-to-day
market price volatility. However, the foreign markets, for the most part,
have experienced continued downward movement in interest rates. Your
Fund currently has positions in the following markets - Canada, New
Zealand, Australia, Britain, France, Germany and Italy as well as in
European currency units. As this letter is being written, we have our
German and French currency positions hedged. As we move farther into
1994, we expect to see some changes in our asset allocations. Liquidity in
all markets has become thinner, and the U.S. dollar appears to be in a
stronger position. In this type of environment, we will check to see if
using futures or other derivative products can provide a cheaper and more
easily traded method of participating in foreign markets.
All of our investments must be of investment grade at purchase. We
will be looking carefully for issues which we hope will perform better
than U.S. Treasuries.
We continue to review the global marketplace to find value
opportunities for your Fund. As additional investment opportunities
develop, we may look to change the portfolio structure. We will continue
to look for attractive current yields within our credit standards while
still maintaining a dollar-weighted average maturity of 10 years or less.
Very truly yours,
(Barbara L. Kenworthy Signature Logo)
Barbara L. Kenworthy
President
January 3, 1994
New York, N.Y.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1993 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES-94.5% AMOUNT VALUE
------------ ------------
<S> <C> <C>
BANKING AND FINANCE-2.4% First Interstate Bancorp, Notes,
10 1/2%, 1996....................................... $ 1,000,000 $ 1,114,935
Household Financial, Retractable Sr. Notes,
11.85%, 1996........................................ 1,498,689(a) 1,649,906
RBSG Capital, Notes
(Gtd. by The Royal Bank of Scotland Group PLC),
10 1/8%, 2004....................................... 1,000,000 1,249,704
------------
4,014,545
------------
FOREIGN/GOVERNMENTAL-32.9% Australian Government Securities:
Commonwealth Government Bonds:
13%, 1996......................................... 3,300,500(b) 3,870,661
12%, 2001......................................... 1,980,300(b) 2,616,867
Treasury Corp. of Victoria, Bonds
(Gtd. by The Government of Victoria),
8 1/4%, 2003........................................ 3,300,500(b) 3,519,983
British Government Securities;
Gilt Edged Securities,
10 1/2%, 1997..................................... 2,980,000(c) 3,384,163
Canadian Government Securities:
Canadian Government Bonds,
10 3/4%, 2009..................................... 1,498,689(a) 1,955,489
Hydro-Quebec, Deb.
(Gtd. by The Province of Quebec):
Ser. HX, 10 1/2%, 2021.......................... 1,498,689(a) 1,823,754
Ser. IC, 9 5/8%, 2022........................... 1,498,689(a) 1,685,425
Province of British Columbia:
Bonds,
Ser. BCCG-1, 7 3/4%, 2003....................... 3,746,722(a) 3,865,867
Exchangeable Bonds,
Ser. BCCD-F, 9 3/4%, 2001........................ 749,344(a) 907,456
Province of New Brunswick, Sinking Fund Deb.,
Ser. EE, 9 1/8%, 2002............................. 1,124,016(a) 1,249,063
Province of Newfoundland, Sinking Fund Deb.,
11 5/8%, 2007..................................... 2,000,000 2,827,354
Province of Ontario, Bonds,
8%, 2003.......................................... 1,498,689(a) 1,546,647
Province of Quebec, Deb.,
13 1/4%, 2014..................................... 3,200,000 4,407,965
French Government Securities:
Credit Foncier of France, Bonds
(Gtd. by The Republic of France),
9 3/4%, 1995...................................... 3,372,000(d) 3,502,497
French Treasury Bonds,
9%, 1995.......................................... 4,226,543(e) 4,391,378
German Government Securities;
Bundesrepublik Deutschland,
9%, 2000.......................................... 2,332,362(f) 2,773,761
New Zealand Government Securities;
New Zealand Government Bonds:
10%, 1997......................................... 2,188,800(g) 2,474,438
10%, 2002......................................... 5,472,000(g) 6,780,301
------------
53,583,069
------------
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
------------ ------------
FOREIGN/SUPRANATIONAL-5.2% European Economic Community, Notes,
11 5/8%, 1995....................................... $ 469,360(h) $ 492,828
International Bank for Reconstruction and Development:
Bonds,
12 1/2%, 1997..................................... 2,188,800(g) 2,644,070
Medium-Term Notes,
Ser. B, 9 3/4%, 1998.............................. 4,500,000 5,292,495
------------
8,429,393
------------
OTHER-6.9% City of New York, General Obligation Taxable Bonds,
Ser. D, 9.85%, 2008................................. 3,000,000 3,341,250
Occidental Petroleum, Sr. Deb.,
11 3/4%, 2011....................................... 3,000,000 3,478,359
Procter & Gamble, Bonds,
10 7/8%, 2001....................................... 3,746,722(a) 4,421,506
------------
11,241,115
------------
U.S. GOVERNMENT AND AGENCIES-47.1% Federal National Mortgage Association,
Real Estate Mortgage Investment Conduit
(Collateralized by FNMA Pass-Through Ctfs.),
Ser. 1993-31, Cl. 31-L,
7 1/2%, 2019 (Interest Only Obligation). ........... (i) 1,170,825
Government National Mortgage Association I,
10%, 1998........................................... 145,715 158,920
U.S. Treasury Bonds:
11 1/2%, 11/15/1995................................. 9,000,000 10,224,846
13 1/8%, 5/15/2001.................................. 3,400,000 4,948,595
12%, 8/15/2013. .................................... 16,300,000 25,170,770
U.S. Treasury Notes:
13 1/8%, 5/15/1994.................................. 18,400,000 19,219,370
11 1/4%, 5/15/1995.................................. 14,100,000 15,549,663
6 1/4%, 2/15/2003................................... 100,000 103,219
------------
76,546,208
------------
TOTAL BONDS AND NOTES
(cost $154,813,660)................................. $153,814,330
============
SHORT-TERM INVESTMENTS-6.4%
CERTIFICATES OF DEPOSIT-5.3% Bank of New York (London):
5 3/4%, 12/1/93....................................... $ 4,317,218(c) $ 4,317,218
5 1/4%, 12/15/93...................................... 4,331,500(c) 4,331,500
------------
8,648,718
------------
TIME DEPOSIT-1.1% Chemical Bank (London),
3 1/16%, 12/1/93.................................... 1,735,000 1,735,000
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $11,205,385).................................. $ 10,383,718
============
TOTAL INVESTMENTS (cost $166,019,045).................................................... 100.9% $164,198,048
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES................................................... (.9%) $ (1,543,628)
====== ============
NET ASSETS............................................................................... 100.0% $162,654,420
====== ============
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO STATEMENT OF INVESTMENTS:
(a) Denominated in Canadian Dollars.
(b) Denominated in Australian Dollars.
(c) Denominated in British Pounds.
(d) Denominated in European Currency Units.
(e) Denominated in French Francs.
(f) Denominated in German Deutsche Marks.
(g) Denominated in New Zealand Dollars.
(h) Denominated in Italian Lire.
(i) Notional face $10,292,963.
See independent accountants' review report and notes to financial
statements.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1993 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $166,019,045)-see statement........................................ $164,198,048
Cash............................................................................. 150,890
Interest receivable.............................................................. 2,788,930
Net unrealized appreciation on forward currency exchange contracts-Note 3(a)..... 38,923
Prepaid expenses................................................................. 2,708
------------
167,179,499
LIABILITIES:
Due to The Dreyfus Corporation................................................... $ 93,934
Payable for investment securities purchased...................................... 4,331,500
Accrued expenses................................................................. 99,645 4,525,079
---------- ------------
NET ASSETS............................................................................... $162,654,420
============
REPRESENTED BY:
Paid-in capital.................................................................. $166,237,247
Accumulated undistributed investment income-net.................................. 741,882
Accumulated net realized (loss) on investments................................... (2,542,635)
Accumulated net unrealized (depreciation) on investments and forward currency
exchange contracts-Note 3(b)............................................. (1,782,074)
------------
NET ASSETS at value applicable to 14,960,617 outstanding shares of
Common Stock, equivalent to $10.87 per share (100 million
shares of $.001 par value authorized)............................................ $162,654,420
============
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1993 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME (net of $33,860 foreign taxes withheld at source)................ $ 7,343,389
EXPENSES:
Management fee-Note 2(a)................................................. $ 577,533
Shareholders' reports.................................................... 35,270
Shareholder servicing costs.............................................. 35,035
Custodian fees........................................................... 29,091
Professional fees........................................................ 24,938
Directors' fees and expenses-Note 2(b)................................... 16,808
Registration fees........................................................ 12,060
Miscellaneous............................................................ 3,758
----------
TOTAL EXPENSES........................................... 734,493
------------
INVESTMENT INCOME-NET.................................... 6,608,896
------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a)..................................... $ (345,379)
Net realized gain on financial futures--Note 3(a)................................ 97,460
----------
NET REALIZED (LOSS)...................................................... (247,919)
Net unrealized (depreciation) on investments and forward
currency exchange contracts.............................................. (1,636,485)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS........ (1,884,404)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $ 4,724,492
============
See independent accountants' review report and notes to financial
statements.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
MAY 31, 1993 NOVEMBER 30, 1993
(UNAUDITED)
------------ -----------------
OPERATIONS:
Investment income-net. .......................................................... $ 14,098,975 $ 6,608,896
Net realized gain (loss) on investments.......................................... 109,023 (247,919)
Net unrealized appreciation (depreciation) on investments for the period......... 110,870 (1,636,485)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... 14,318,868 4,724,492
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................................ (13,434,533) (7,017,744)
Net realized gain on investments................................................. (1,391,883) ---
------------ ------------
TOTAL DIVIDENDS.......................................................... (14,826,416) (7,017,744)
------------ ------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested-Note 1(c)................................................... 1,484,846 773,178
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................. 977,298 (1,520,074)
NET ASSETS:
Beginning of period.............................................................. 163,197,196 164,174,494
------------ ------------
End of period (including undistributed investment income-net:
$1,150,730 and $741,882, respectively). ................................. $164,174,494 $162,654,420
============ ============
SHARES SHARES
------------ ------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED............... 133,323 69,684
============ ============
See independent accountants' review report and notes to financial
statements.
</TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, 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 information provided in the financial
statements and market price data for the Fund's shares.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, SIX MONTHS ENDED
--------------------------------------------------- NOVEMBER 30, 1993
PER SHARE DATA: 1989(1) 1990 1991 1992 1993 (UNAUDITED)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $11.11(2) $10.76 $10.70 $10.92 $11.06 $11.03
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................................... 1.00 1.10 1.06 1.01 .95 .44
Net realized and unrealized gain (loss) on investments.. (.38) (.08) .24 .19 .02 (.13)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.................... .62 1.02 1.30 1.20 .97 .31
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.................... (.94) (1.08) (1.08) (1.03) (.91) (.47)
Dividends from net realized gain on investments......... (.03) -- -- (.03) (.09) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................. (.97) (1.08) (1.08) (1.06) (1.00) (.47)
------ ------ ------ ------ ------ ------
Net asset value, end of period.......................... $10.76 $10.70 $10.92 $11.06 $11.03 $10.87
====== ====== ====== ====== ====== ======
Market Value, end of period............................. $10.7/8 $ 9.7/8 $11.1/8 $11.1/2 $11.1/2 $10.3/4
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (.96%)(3) .47% 24.63% 13.83% 9.36% (4.95%)(3)
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .89%(3) .89% .87% .88% .88% .89%(3)
Ratio of net investment income to
average net assets...................................... 10.00%(3) 10.11% 9.67% 9.18% 8.57% 8.01%(3)
Portfolio Turnover Rate................................. 83.78%(4) 16.34% 26.38% 56.29% 43.00% 6.57%(4)
Net Assets, end of period (000's Omitted)............... $156,986 $156,198 $159,751 $163,197 $164,174 $162,654
- ---------------------------
(1) From June 24, 1988 (commencement of operations) to May 31, 1989.
(2) Net of offering costs charged to paid-in capital.
(3) Annualized.
(4) Not annualized.
See independent accountants' review report and notes to financial
statements.
</TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a non-diversified closed-end management investment company.
The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser.
(A) PORTFOLIO VALUATION: Investments in securities (including
options and financial futures, but excluding domestic-debt securities) 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 on the last business day of each week and month.
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. Bid price is used when no asked
price is available. Investments traded in foreign currencies are translated
to U.S. dollars at the prevailing rates of exchange.
Most domestic-debt securities (excluding short-term investments)
are valued on the last business day of each week and month by an
independent pricing service ("Service") approved by the Board of
Directors. Domestic-debt securities for which quoted bid prices in the
judgment of the Service are readily available and are representative of
the bid side of the market are valued at the mean between the quoted bid
prices (as obtained by the Service from dealers in such securities) and
asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other domestic-debt securities are carried at
fair value as determined by the Service, based on methods which include
consideration of: yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and
general market conditions. Short-term investments are carried at
amortized cost, which approximates value.
(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 including, where applicable, amortization of discount on
investments, is recognized on the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net and net short-term
realized capital gain are normally declared and paid monthly. Dividends
from net long-term realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
For shareholders who elect to receive their distributions in
additional shares of the Fund, in lieu of cash, such
distributions will be reinvested at the lower of the market price or net
asset value per share (but not less than 95% of the market price) based on
the record date's respective price. If the net asset value per share on the
record date is lower than the market price per share, shares will be
issued by the Fund at the record date's net asset value on the payable date
of the distribution. If the net asset value per share is less than 95% of
market value, shares will be issued by the Fund at 95% of market value. If
the market price is lower than the net asset value per share on the record
date, Mellon Bank, N.A. will purchase Fund shares in the open market
commencing on the payable date, and reinvest those shares accordingly. As
a result of purchasing Fund shares in the open market, Fund shares
outstanding will not be affected by this form of reinvestment.
On November 30, 1993, the Board of Directors declared a cash
dividend of $.075 per share from investment income-net, payable on
December 29, 1993 to shareholders of record as of the close of business
on December 14, 1993.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET INCREASE
TOTAL NET NET REALIZED & (DECREASE) IN NET
INVESTMENT INVESTMENT UNREALIZED GAIN ASSETS RESULTING
INCOME INCOME (LOSS) ON INVESTMENTS FROM OPERATIONS
----------------- ---------------- --------------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(000'S) PER (000'S) PER (000'S) PER (000'S) PER
QUARTER ENDED OMITTED SHARE OMITTED SHARE OMITTED SHARE OMITTED SHARE
- ------------- ------- ------ ------- ------ ------- ------ ------- ------
August 31, 1992....... $ 4,150 $ 0.28 $ 3,767 $ 0.25 $ 5,220 $ 0.36 $ 8,987 $ 0.61
November 30, 1992..... 3,776 0.25 3,408 0.23 (8,375) (0.57) (4,967) (0.34)
February 28, 1993..... 3,852 0.26 3,463 0.24 3,748 0.25 7,211 0.49
May 31, 1993.......... 3,767 0.26 3,461 0.23 (373) (0.02) 3,088 0.21
------- ------ ------- ------ ------- ------ ------- ------
Total......... $15,545 $ 1.05 $14,099 $ 0.95 $ 220 $ 0.02 $14,319 $ 0.97
======= ====== ======= ====== ======= ====== ======= ======
August 31, 1993....... $ 3,716 $ 0.25 $ 3,323 $ 0.22 $ 1,842 $ 0.12 $ 5,165 $ 0.34
November 30, 1993..... 3,627 0.24 3,286 0.22 (3,727) (0.25) (441) (0.03)
------- ------ ------- ------ ------- ------ ------- ------
Total......... $ 7,343 $ 0.49 $ 6,609 $ 0.44 $(1,885) $(0.13) $ 4,724 $ 0.31
======= ====== ======= ====== ======= ====== ======= ======
</TABLE>
(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 provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .70 of 1%
of the average weekly value of the Fund's net assets and is payable
monthly.
(B) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of the Manager. Each director who is not
an "affiliated person" receives an annual fee of $4,500 and an attendance
fee of $500 per meeting.
(C) On December 5, 1993, the Manager entered into an Agreement and
Plan of Merger providing for the merger of the Manager with a subsidiary
of Mellon Bank Corporation ("Mellon").
Upon closing of the merger, it is planned that the Manager will
retain its New York headquarters and will be a separate subsidiary within
the Mellon organization. It is expected that the Manager's management
team and mutual fund managers will remain in place, and the Dreyfus
mutual funds will be operated in the same manner as they are currently.
Following the merger, the Manager will be either a direct or indirect
subsidiary of Mellon, whose principal banking subsidiary is Mellon Bank,
N.A. Closing of this merger is subject to a number of contingencies,
including the receipt of certain regulatory approvals and the approvals of
the stockholders of the Manager and of Mellon. The merger is expected to
occur in mid-1994, but could occur significantly later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company
Act of 1940, and thus a termination of such Agreement, the Manager will
seek prior approval from the Fund's Board and shareholders.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment
securities, excluding short-term securities and forward currency
exchange contracts, during the six months ended November 30, 1993,
amounted to $13,848,407 and $10,209,318, respectively.
In addition, the following summarizes open forward currency
exchange contracts at November 30, 1993:
U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS PROCEEDS VALUE APPRECIATION
- ------------------------------- -------- ----------- ------------
Deutsche Marks, expiring 12/27/93 $2,698,501 $2,678,311 $20,190
French Francs, expiring 12/27/93 4,229,259 4,210,526 18,733
-------
$38,923
=======
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 engaged in trading financial futures contracts. The Fund
is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change
in the market value of the contract at the close of each day's trading.
Accordingly, variation margin payments are made or received to reflect
daily unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial
margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. At November 30,
1993, there were no financial futures contracts outstanding.
(B) At November 30, 1993, accumulated net unrealized depreciation
on investments was $1,782,074, consisting of $5,207,893 gross
unrealized appreciation and $6,989,967 gross unrealized depreciation.
At November 30, 1993, 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 STRATEGIC GOVERNMENTS INCOME, INC.
REVIEW REPORT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
We have reviewed the accompanying statement of assets and
liabilities of Dreyfus Strategic Governments Income, Inc., including the
statement of investments, as of November 30, 1993, and the related
statements of operations and changes in net assets and financial
highlights for the six month period ended November 30, 1993. These
financial statements and financial highlights are the responsibility of the
Fund's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope than
an audit conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the objective of
expressing an opinion regarding the financial statements and financial
highlights taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications
that should be made to the interim financial statements and financial
highlights referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year
ended May 31, 1993 and financial highlights for each of the five years in
the period ended May 31, 1993 and in our report dated July 12, 1993, we
expressed an unqualified opinion on such statement of changes in net
assets and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
January 6, 1994
(Dreyfus Logo)
DREYFUS STRATEGIC GOVERNMENTS
INCOME, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND PAYING AGENT AND REGISTRAR
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Printed in U.S.A. 429SA9311
(Dreyfus Logo)
Strategic
Governments
Income, Inc.
Semi-Annual
Report
November 30,1993
(Dreyfus Lion Logo)
