DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to inform you that Dreyfus Strategic Governments Income,
Inc. paid income dividends of $.785 per share during the Fund's annual
reporting period ended November 30, 1995. Based on the Fund's closing market
price of $9.125 per share on November 30, 1995, this equals a distribution
rate per share of 8.60%.
Over the last 12 months, we have seen the bond market rally
significantly. On November 7, 1994, the ten-year Treasury note traded at
8.03%. A little over a year later, on November 30, 1995, the ten-year
Treasury note traded at 5.74%. During this period, we have tried to keep the
domestically managed portion of the Fund at its longest possible maturity. By
doing so, we participated in the rally as much as possible to maximize a
positive total return. We are limited by the Prospectus to a maximum average
maturity of ten years.
During the last six months we sold a 6% position of Hydro Quebec Electric
bonds for a profit as we thought the Quebec referendum to secede from Canada
would be too close to call and the risk of holding the securities would be
much greater than the reward. We also secured a position in Time Warner
Entertainment, L.P. bonds as a partial replacement for the Hydro Quebec
bonds. Since our purchase, these bonds have been upgraded by one of the
rating services.
With respect to the Fund's international bonds in the portfolio,
considerable changes were made since October 1, 1995. At that time, S.A.M.
Finance, S.A., based in Paris, began sub-advising a certain portion of the
Fund's international holdings. Prior to S.A.M. Finance, S.A., the portfolio's
foreign holdings were invested in three markets - Canada, Australia and
Sweden. S.A.M. Finance, S.A. has taken a more diversified approach, and has
structured the portfolio based on the makeup of the JP Morgan Global
Government Bond Index (less USA), which is composed of bonds from Australia,
Belgium, Canada, Denmark, France, Germany, Great Britain, Italy, Japan, the
Netherlands, Spain and Sweden. S.A.M. Finance, S.A. currently favors the
Italian, German and Spanish markets, and is therefore more heavily weighted
in these countries compared to the Index (Belgium, Denmark and the
Netherlands are considered parts of the German Mark zone). They are
pessimistic about the market outlooks of Japan, Canada and Australia (and are
therefore less weighted in these countries compared to the Index) and neutral
on France and Great Britain.
We continue to monitor the markets intensively, and will make adjustments
to the portfolio when we believe it is appropriate. We appreciate your
participation in the Fund and look forward to continuing to serve your
investment needs.
Sincerely,
Garitt A. Kono signature logo]
Garitt A. Kono
Portfolio Manager
December 15, 1995
New York, N.Y.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
SELECTED INFORMATION NOVEMBER 30, 1995 (UNAUDITED)
Market Price per share November 30, 1995...................... $9 1\8
Shares Outstanding November 30, 1995.......................... 14,640,617
New York Stock Exchange Ticker Symbol......................... DSI
MARKET PRICE (NEW YORK STOCK EXCHANGE)
FISCAL YEAR ENDED NOVEMBER 30, 1995
________________________________________________________________________________________________________
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
FEBRUARY 28, 1995 MAY 31, 1995 AUGUST 31, 1995 NOVEMBER 30, 1995
_____________ _____________ _______________ __________________
<S> <C> <C> <C> <C>
High $9 3\8 $9 1\2 $9 3\4 $9 3\8
Low 8 5\8 8 7\8 8 7\8 9
Close 9 3\8 9 1\2 9 9 1\8
PERCENTAGE GAIN based on change in Market Price*
June 24, 1988 (commencement of operations) through November 30, 1995.................. 52.10%
December 1, 1990 through November 30, 1995............................................ 33.20
December 1, 1994 through November 30, 1995............................................ 8.80
March 1, 1995 through November 30, 1995............................................... 3.59
June 1, 1995 through November 30, 1995................................................ .03
September 1, 1995 through November 30, 1995........................................... 3.46
NET ASSET VALUE PER SHARE
June 24, 1988 (commencement of operations).......................... $ 11.11
November 30, 1994................................................... 9.85
February 28, 1995................................................... 10.05
May 31, 1995........................................................ 10.43
August 31, 1995..................................................... 10.46
November 30, 1995................................................... 10.66
PERCENTAGE GAIN based on change in Net Asset Value*
June 24, 1988 (commencement of operations) through November 30, 1995.................. 91.74%
December 1, 1990 through November 30, 1995............................................ 52.06
December 1, 1994 through November 30, 1995............................................ 17.64
March 1, 1995 through November 30, 1995............................................... 12.78
June 1, 1995 through November 30, 1995................................................ 6.33
September 1, 1995 through November 30, 1995........................................... 3.89
*With dividends reinvested.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES-97.1% AMOUNT VALUE
_______ _______
<S> <C> <C> <C>
BANKING AND FINANCE-14.1% American International Group,
Bonds, 11.70%, 2001.................. $ 1,876,173 (a) $1,946,529
Citicorp,
Sub. Notes, 7 1/8%, 2004............. 5,000,000 5,241,760
Commercial Credit,
Notes, 7 3/4%, 2005.................. 2,000,000 2,182,338
First Interstate Bancorp,
Notes, 10 1/2%, 1996................. 1,000,000 1,010,749
Ford Motor Credit,
Notes, 7 3/4%, 2005.................. 5,000,000 5,460,275
General Electric Capital,
Deb., 7%, 2000....................... 1,274,968 (b) 1,453,464
KFW International Finance,
Gtd. Bonds, 6%, 1999................. 2,941,176 (c) 3,463,235
RBSG Capital,
Notes (Gtd. by The Royal Bank of Scotland
Group PLC), 10 1/8%, 2004............ 1,000,000 1,231,128
___________
21,989,478
___________
CONSUMER-4.3%......... Nabisco,
Notes, 6.85%, 2005................... 2,500,000 2,510,178
Time Warner Entertainment, L.P.,
Sr. Deb., 8 3/8%, 2023............... 4,000,000 4,245,768
___________
6,755,946
___________
FOREIGN/
GOVERNMENTAL-28.8% Austrian Government Securities;
Republic of Austria,
Sr. Bonds, 4 1/2%, 2005........... 2,941,176 (c) 3,323,530
British Government Securities:
United Kingdom, Gilt Edged Securities:
9 3/4%, 2002......................... 1,989,000 (d) 2,243,219
9 1/2%, 2005......................... 1,530,000 (d) 1,722,206
Canadian Government Securities:
Province of Newfoundland,
Sinking Fund Deb., 11 5/8%, 2007..... 2,000,000 2,765,600
Province of Quebec,
Deb., 13 1/4%, 2014................. 3,200,000 4,067,968
French Government Securities:
France O.A.T., Deb.:
10%, 2000............................ 1,000,600 (e) 1,144,987
8 1/2%, 2002......................... 800,480 (e) 882,770
8 1/2%, 2008......................... 600,360 (e) 669,642
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
_______ _______
FOREIGN/
GOVERNMENTAL (CONTINUED) German Government Securities:
Bundesrepublik Deutschland, Bonds:
7 1/4%, 2000......................... $ 3,455,425 (f) $ 3,744,299
9%, 2000............................. 1,382,170 (f) 1,601,106
8 1/4%, 2001......................... 3,455,425 (f) 3,917,070
6 7/8%, 2005......................... 3,455,425 (f) 3,608,500
German Unity Bonds,
8 3/4%, 2001......................... 1,382,170 (f) 1,600,138
Treuhandanstalt,
Bonds, 6 7/8%, 2003.................. 3,455,425 (f) 3,629,578
New Zealand Government Securities;
Government of New Zealand,
Bonds, 10 5/8%, 2005................. 3,000,000 3,974,235
Spanish Government Securities:
Kingdom of Spain, Bonds,
9 1/4%, 2004......................... 1,000,600 (e) 1,143,186
Government of Spain, Deb.:
10 1/4%, 1998........................ 1,621,403 (g) 1,645,724
10.10%, 2001......................... 1,621,403 (g) 1,587,839
10.30%, 2002......................... 1,621,403 (g) 1,621,727
___________
44,893,324
___________
FOREIGN/SUPRANATIONAL-2.7% European Investment Bank,
Notes, 12 3/4%, 2000................. 2,501,563 (a) 2,679,800
Export-Import Bank of Japan,
Gtd. Notes, 7 3/4%, 2005............. 1,382,170 (f) 1,497,581
___________
4,177,381
___________
UTILITIES-.6% Kyushu Electric Power,
Bonds, 4 1/4%, 2002.................. 849,979 (b) 870,165
___________
OTHER-2.1% City of New York,
General Obligation Taxable Bonds,
Ser. D, 9.85%, 2008.................. 3,000,000 3,348,750
___________
U.S. GOVERNMENT
AND AGENCIES-44.5% Government National Mortgage Association I:
10%, 1998............................ 87,635 92,921
7 1/2%, 2023......................... 3,708,322 3,788,274
8%, 2023............................. 8,082,677 8,368,077
U.S. Treasury Bonds:
13 1/8%, 5/15/2001................... 3,400,000 4,597,439
12%, 8/15/2013....................... 16,800,000 25,509,758
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
_______ _______
U.S. GOVERNMENT
AND AGENCIES (CONTINUED) U.S. Treasury Notes:
9 3/8%, 4/15/1996.................... $ 6,000,000 $ 6,083,436
9 1/8%, 5/15/1999.................... 11,000,000 12,234,068
7 3/4%, 12/31/1999................... 4,000,000 4,318,752
7 1/2%, 2/15/2005.................... 4,000,000 4,476,876
___________
69,469,601
___________
TOTAL BONDS AND NOTES
(cost $147,857,130).................. $151,504,645
============
SHORT-TERM INVESTMENT-1.0%
AGENCY DISCOUNT NOTE; Federal Home Loan Mortgage Corp.,
5.80%, 12/1/1995
(cost $1,640,000).................... $ 1,640,000 $ 1,640,000
=============
TOTAL INVESTMENTS (cost $149,497,130) ................................. 98.1% $153,144,645
======== =============
CASH AND RECEIVABLES (NET) ......................................... 1.9% $2,937,968
======== =============
NET ASSETS.................................................................. 100.0% $156,082,613
======== =============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Denominated in Italian Lire.
(b) Denominated in Swiss Francs.
(c) Denominated in Japanese Yen.
(d) Denominated in British Pounds.
(e) Denominated in French Francs.
(f) Denominated in German Deutsche Marks.
(g) Denominated in Spanish Pesetas.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $149,497,130)-see statement..................................... $153,144,645
Cash.................................................................... 48,576
Interest receivable..................................................... 3,322,400
Net unrealized appreciation on forward currency
exchange contracts-Note 3(a).......................................... 683,706
Prepaid expenses........................................................ 21,143
_________
157,220,470
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 89,326
Dividends payable....................................................... 915,039
Accrued expenses and other liabilities.................................. 133,492 1,137,857
________ __________
NET ASSETS ................................................................ $156,082,613
=============
REPRESENTED BY:
Paid-in capital-Note 4.................................................. $161,189,503
Accumulated distributions in excess of investment income-net............ (183,158)
Accumulated net realized (loss) on investments.......................... (9,254,953)
Accumulated net unrealized appreciation on investments and
foreign currency transactions-Note 3(b)............................... 4,331,221
__________
NET ASSETS at value applicable to 14,640,617 shares outstanding
(100 million shares of $.001 par value Common Stock authorized)......... $156,082,613
=============
NET ASSET VALUE, per share
($156,082,613 / 14,640,617 shares)...................................... $10.66
=========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME (net of $74,738 foreign taxes withheld at source)....... $12,752,530
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,049,505
Legal fees............................................................ 102,776
Directors' fees and expenses-Note 2(b)................................ 63,365
Custodian fees........................................................ 50,127
Shareholders' reports................................................. 40,554
Shareholder servicing costs........................................... 39,090
Auditing fees......................................................... 34,890
Registration fees..................................................... 26,396
Miscellaneous......................................................... 8,324
________
TOTAL EXPENSES.................................................... 1,415,027
__________
INVESTMENT INCOME-NET............................................. 11,337,503
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments and foreign currency transactions-Note 3(a) $(1,479,776)
Net unrealized appreciation on investments and foreign currency transactions 13,433,969
___________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 11,954,193
__________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $23,291,696
===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1994 1994* 1995
__________ _______________ ___________
<S> <C> <C> <C>
OPERATIONS:
Investment income-net.............................. $ 13,264,214 $ 6,225,216 $ 11,337,503
Net realized (loss) on investments................. (4,714,313) (3,481,992) (1,479,776)
Net unrealized appreciation (depreciation) on investments
for the year..................................... (5,607,686) (3,349,473) 13,433,969
______________ _____________ ____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. 2,942,215 (606,249) 23,291,696
______________ _____________ ____________
DISTRIBUTIONS TO SHAREHOLDERS:
From investment income-net......................... (13,750,031) (4,197,958) (11,313,830)
In excess of investment income-net................. __ __ (183,158)
From paid-in-capital............................... __ (2,197,706) __
______________ _____________ ____________
TOTAL DISTRIBUTIONS.............................. (13,750,031) (6,395,664) (11,496,988)
______________ _____________ ____________
CAPITAL STOCK TRANSACTIONS:
Dividends reinvested-Note 1(d)..................... 773,178 __ __
Cost of Treasury Stock acquired-Note 4............. __ (1,974,310) (875,728)
______________ _____________ ____________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS........................... 773,178 (1,974,310) (875,728)
______________ _____________ ____________
TOTAL INCREASE (DECREASE) IN NET ASSETS...... (10,034,638) (8,976,223) 10,918,980
NET ASSETS:
Beginning of year.................................. 164,174,494 154,139,856 145,163,633
______________ _____________ ____________
End of year [including undistributed investment income-net;
$664,913 on May 31, 1994 and distributions in excess of
investment income-net: ($23,673) and ($183,158) on
November 30, 1994 and November 30, 1995, respectively] $154,139,856 $145,163,633 $156,082,613
============ ============== =============
SHARES SHARES SHARES
______________ _____________ ____________
CAPITAL SHARE TRANSACTIONS:
Shares issued for dividends reinvested............. 69,684 __ __
Shares of Treasury Stock acquired.................. __ (222,700) (97,300)
______________ _____________ ____________
NET INCREASE (DECREASE) IN SHARES OUTSTANDING.... 69,684 (222,700) (97,300)
=========== =========== ===========
*The Fund changed its fiscal year end from May 31 to November 30.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
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 year indicated. This information
has been derived from the financial statements and market price data for the
Fund's shares.
SIX MONTHS ENDED YEAR ENDED
YEAR ENDED MAY 31, NOVEMBER 30, NOVEMBER 30,
_________________________________________
PER SHARE DATA: 1991 1992 1993 1994 1994(1) 1995
______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.70 $10.92 $11.06 $11.03 $10.30 $9.85
______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net...... 1.06 1.01 .95 .89 .42 .71
Net realized and unrealized gain
(loss) on investments.... .24 .19 .02 (.70) (.44) .82
______ ______ ______ ______ ______ _____
TOTAL FROM INVESTMENT
OPERATIONS........... 1.30 1.20 .97 .19 (.02) 1.53
______ ______ ______ _____ ______ _____
DISTRIBUTIONS:
Dividends from investment
income-net............... (1.08) (1.03) (.91) (.92) (.28) (.71)
Dividends in excess of investment
income-net............... _ _ _ _ _ (.01)
Dividends from net realized gain
on investments........... _ (.03) (.09) _ _ _
Dividends from paid-in-capital _ _ _ _ (.15) _
______ ______ ______ ______ ______ ______
TOTAL DISTRIBUTIONS...... (1.08) (1.06) (1.00) (.92) (.43) (.72)
______ ______ ______ ______ ______ ______
Net asset value, end of year $10.92 $11.06 $11.03 $10.30 $ 9.85 $10.66
====== ====== ====== ====== ====== ======
Market Value, end of year.. $ 1 11\8 $11 1\2 $ 11 1\2 $10.00 $ 9 1\8 $9 1\8
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)..... 24.63% 13.83% 9.36% (5.23%) (8.98%)(3) 8.80%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets............... .87% .88% .88% .89% .92%(3) .94%
Ratio of net investment income to
average net assets....... 9.67% 9.18% 8.57% 8.18% 8.28%(3) 7.56%
Portfolio Turnover Rate.... 26.38% 56.29% 43.00% 22.76% 65.21%(4) 91.27%
Net Assets, end of year
(000's Omitted).......... $159,751 $163,197 $164,174 $154,140 $145,164 $156,083
(1) The Fund changed its fiscal year end from May 31 to November 30.
(2) Calculated based on Market Value.
(3) Annualized.
(4) Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS
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. The Manager
is a direct subsidiary of Mellon Bank, N.A. S.A.M. Finance, S.A. serves as
the Fund's sub-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
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.
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 are readily available and are
representative of the bid side of the market in the judgment of the Service
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) 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 of foreign
currencies, currency gains or losses realized on securities transactions, the
difference between the amounts of 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 at fiscal year end, 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. Interest
income, including, where applicable, amortization of discount on investments,
is recognized on the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and net short-term realized
capital gain, if any, are normally declared and
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
paid monthly. Dividends from net long-term 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. 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.
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) as defined in the dividend reinvestment and cash
purchase plan.
On November 29, 1995, the Board of Directors declared a cash dividend of
$.0625 per share from investment income-net, payable on December 28, 1995 to
shareholders of record as of the close of business on December 13, 1995.
(E) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED & (DECREASE)
UNREALIZED IN NET ASSETS
TOTAL INVESTMENT NET INVESTMENT GAIN (LOSS) RESULTING FROM
INCOME INCOME ON INVESTMENTS OPERATIONS
_________ _________ ______________ ____________
(000'S) PER (000'S) PER (000'S) PER (000'S) PER
QUARTER ENDED OMITTED SHARE OMITTED SHARE OMITTED SHARE OMITTED SHARE
____________ ______ _____ _______ _____ _______ _____ _______ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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)
February 28, 1994.............. 3,668 0.25 3,301 0.22 (1,395) (0.09) 1,906 0.13
May 31, 1994................... 3,703 0.25 3,354 0.23 (7,042) (0.48) (3,688) (0.25)
____ ___ ____ ___ ____ ___ ____ ___
TOTAL...... .. $14,714 $ 0.99 $13,264 $ 0.89 $(10,322) ($0.70) $ 2,942 $ 0.19
==== === ==== === ===== === ==== ===
August 31, 1994................$ 3,558 $ 0.24 $ 3,210 $ 0.21 $ (2,386) ($0.15) $ 824 $ 0.06
November 30, 1994.............. 3,360 0.23 3,015 0.21 (4,445) (0.29) (1,430) (0.08)
____ ___ ____ ___ ____ ___ ____ ___
TOTAL.................. $ 6,918 $ 0.47 $ 6,225 $ 0.42 $ (6,831) ($0.44) $ (606) ($0.02)
==== === ==== === ===== === ==== ===
February 28, 1995............. $ 3,227 $ 0.22 $ 2,893 $ 0.20 $ 2,919 $ 0.20 $ 5,812 $ 0.40
May 31, 1995................... 3,263 0.22 2,896 0.20 5,643 0.39 8,539 0.59
August 31, 1995................ 3,253 0.22 2,844 0.19 473 0.03 3,317 0.22
November 30, 1995.............. 3,010 0.21 2,705 0.19 2,919 0.20 5,624 0.39
____ ___ ____ ___ ____ ___ ____ ___
TOTAL..................... $12,753 $ 0.87 $11,338 $ 0.78 $ 11,954 $ 0.82 $23,292 $ 1.60
==== === ==== === ===== === ==== ===
</TABLE>
(F) 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 Internal Revenue 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 $7,437,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1995. The
carryover does not include net realized securities losses from November 1,
1995 through November 30, 1995 which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, $768,000 of the
carryover expires in fiscal 2001, $6,651,000 expires in fiscal 2002 and
$18,000 expires in fiscal 2003.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
Pursuant to a Sub-Investment Advisory Agreement between the Manager and
S.A.M. Finance, S.A., the sub-advisory fee is computed at the annual rate of
.20 of 1% of the average daily value of the Fund's net assets and is payable
monthly by the Manager.
The Fund compensates Mellon Bank, N.A., an affiliate of the Manager,
under a transfer agency agreement for providing personnel and facilities to
perform transfer agency services for the Fund. Such compensation amounted to
$48,953 for the year ended November 30, 1995.
(B) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
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 year ended November 30, 1995, amounted to $135,805,355 and
$129,030,737, respectively.
In addition, the following summarizes open forward currency exchange
contracts at November 30, 1995:
<TABLE>
<CAPTION>
FOREIGN
CURRENCY U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS AMOUNT PROCEEDS VALUE APPRECIATION
________ ________ ___________ _____________
<S> <C> <C> <C> <C>
British Pounds, expiring 2/15/96... 2,664,800 $4,151,758 $4,078,476 $ 73,282
French Francs, expiring 2/15/96..... 20,336,800 4,186,738 4,066,547 120,191
German Deutsche Marks, expiring 2/15/96 14,000,000 9,989,654 9,710,758 278,896
Italian Lire, expiring 2/15/96...... 8,266,284,000 5,140,084 5,116,066 24,018
Japanese Yen, expiring 2/15/96...... 180,000,000 1,795,869 1,782,531 13,338
Spanish Pesetas, expiring 2/15/96... 635,481,500 5,202,468 5,118,246 84,222
Swiss Francs, expiring 2/15/96...... 2,884,292 2,558,131 2,468,372 89,759
_____
$683,706
=====
</TABLE>
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. 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
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 gains on such contracts that are
recognized in the statement of assets and liabilities.
(B) At November 30, 1995, accumulated net unrealized appreciation on
investments and forward foreign currency contracts was $4,331,221, consisting
of $5,719,598 gross unrealized appreciation and $1,388,377 gross unrealized
depreciation.
At November 30, 1995, 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 4-CAPITAL STOCK:
The Fund repurchased 97,300 shares of Treasury Stock during the year
ended November 30, 1995 at an average market price per share of $9.00 and a
weighted average discount from net asset value of 8.68% per share. At
November 30, 1995 paid-in capital is net the cost of $2,850,038 of Treasury
Stock reacquired.
Fund shares traded at an average discount of more than 10% from their net
asset value for the 12-week period ended December 29, 1995. In accordance
with the Fund's Prospectus for its initial public offering, under such
circumstances the Fund will submit a proposal to shareholders to convert the
Fund from a closed-end to an open-end fund at its next annual shareholder
meeting.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Governments Income, Inc., including the statement of
investments, as of November 30, 1995, and the related statement of operations
for the year then ended, and the statement of changes in net assets and
financial highlights for 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 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. Our procedures included confirmation of
securities owned as of November 30, 1995 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 Strategic Governments Income, Inc., at November 30, 1995,
the results of its operations for the year then ended, and the changes in its
net assets and financial highlights for the periods indicated therein, in
conformity with generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
January 10, 1996
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (UNAUDITED)
The Fund generally distributes net investment income and any net realized
short-term capital gains monthly, and net realized long-term capital gains at
least annually.
Under the Fund's Dividend Reinvestment and Cash Purchase Plan (the
"Plan"), a shareholder who has Fund shares registered in his own name will
have all distributions reinvested automatically by Mellon Bank, N.A., as Plan
agent (the "Agent"), in additional shares of the Fund's Common Stock at the
lower of prevailing market price or net asset value (but not less than 95% of
market value at the time of valuation) unless such shareholder elects to
receive cash as provided below. If market price is equal to or exceeds net
asset value, shares will be issued at net asset value. If net asset value
exceeds market price or if a dividend or other distribution payable only in
cash is declared, the Agent, as agent for the Plan participants, will buy
shares of the Fund's Common Stock in the open market. A Plan participant is
not relieved of any income tax that may be payable on such dividends or
distributions.
A shareholder who owns Fund shares registered in the name of his
broker/dealer or other nominee (i.e., in "street name") may not participate
in the Plan, but may elect to have cash dividend distributions reinvested by
his broker/dealer or other nominee in additional shares of the Fund if such
service is provided by the broker/dealer or other nominee; otherwise such
distributions will be treated like any other cash dividend.
A shareholder who has Fund shares registered in his name may elect to
withdraw from the Plan at any time for a $5.00 fee and thereby elect to
receive cash in lieu of shares of the Fund. Changes in elections must be in
writing, sent to Mellon Bank, N.A., P.O. Box 750, Pittsburgh, Pennsylvania
15230, Attention: Dividend Reinvestment, should include the shareholder's
name and address as they appear on the Agent's records and will be effective
only if received more than fifteen days prior to the record date for any
distribution.
A Plan participant who has Fund shares registered in his name has the
option of making additional cash payments to the Agent, semi-annually, in any
amount from $100 to $500, for investment in the Fund's shares in the open
market on or about January 15 and July 15. Any voluntary cash payments
received more than 30 days prior to these dates will be returned by the
Agent, and interest will not be paid on any uninvested cash payments. A
participant may withdraw a voluntary cash payment by written notice, if the
notice is received by the Agent not less than 48 hours before the payment is
to be invested. A shareholder who owns Fund shares registered in street name
should consult his broker/dealer to determine whether an additional cash
purchase option is available through his broker/dealer.
The Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account. Shares in the
account of each Plan participant will be held by the Agent in
non-certificated form in the name of the participant, and each such
participant's proxy will include those shares purchased pursuant to the Plan.
Plan participants pay an Agent's fee of $.50 per reinvestment of
dividends and distributions, a pro rata share of brokerage commissions
incurred with respect to the Agent's open market purchases and purchases from
voluntary cash payments, and a $3.00 fee for each purchase made from a
voluntary cash payment.
The Fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to Plan participants at least
90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by the Agent on at least 90 days' written
notice to Plan participants.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
PROXY RESULTS (UNAUDITED)
During the fiscal year ended November 30, 1995, stockholders voted on the
following proposals presented at the annual stockholders' meeting held on
August 18, 1995. The description of each proposal and the number of shares
voted are as follows:
FOR AGAINST ABSTAINED
______ _______ _________
<S> <C> <C> <C>
1.TO CONSIDER A PROPOSAL TO CONVERT THE FUND
FROM A CLOSED-END INVESTMENT COMPANY
TO AN OPEN-END INVESTMENT COMPANY......................... 2,017,117 4,658,232 457,234
2.TO APPROVE A NEW MANAGEMENT AGREEMENT
BETWEEN THE FUND AND THE DREYFUS CORPORATION
AND A SUB-INVESTMENT ADVISORY AGREEMENT
BETWEEN THE DREYFUS CORPORATION AND S.A.M.
FINANCE, S.A.............................................. 11,264,950 505,727 500,914
3.TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT AUDITORS OF THE FUND....................... 11,911,861 174,582 177,393
</TABLE>
<TABLE>
<CAPTION>
FOR AUTHORITY WITHHELD
___ __________________
<S> <C> <C>
4.TO ELECT ONE CLASS I AND TWO CLASS III DIRECTORS:*
CLASS I
Joseph S. DiMartino................................. 11,848,390 423,890
CLASS III
Diane Dunst......................................... 11,875,398 396,882
Rosalind Gersten Jacobs............................. 11,853,936 418,344
* The terms of these Class I and Class III Directors expire in 1996 and
1998, respectively. Warren B. Rudman and Sander Vanocur also are Class I
Directors whose terms expire in 1996, and David W. Burke, Jay I. Meltzer and
Daniel Rose are Class I Directors whose terms expire in 1997.
</TABLE>
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino, Chairman
David W. Burke
Diane Dunst
Rosalind Gersten Jacobs
Jay I. Meltzer
Daniel Rose
Warren B. Rudman
Sander Vanocur
OFFICERS
President and Treasurer
Marie E. Connolly
Vice President and Secretary
John E. Pelletier
Vice President and Assistant Treasurer
Frederick C. Dey
Vice President and Assistant Secretary
Eric B. Fischman
Vice President and Assistant Secretary
Elizabeth Bachman
Assistant Treasurer
John J. Pyburn
Assistant Treasurer
Joseph F. Tower, III
Assistant Secretary
Margaret M. Pardo
PORTFOLIO MANAGERS
Garitt Kono
Gerald Thunelius
Jean Charles Bertrand
Michel-Andre Levy
Thierry Mirabe
Pierre Sequier
Jacques Sikarov
INVESTMENT ADVISER
The Dreyfus Corporation
SUB-INVESTMENT ADVISER
S.A.M. Finance, S.A.
CUSTODIAN
The Bank of New York
COUNSEL
Stroock & Stroock & Lavan
TRANSFER AGENT,
DIVIDEND DISTRIBUTION AGENT
AND REGISTRAR
Mellon Bank, N.A.
STOCK EXCHANGE LISTING
NYSE Symbol: DSI
INITIAL SEC EFFECTIVE DATE
June 23, 1988
The Net Asset Value appears in the
following publications: Barron's, Closed-End Funds section under
the heading "World Income Funds"
every Monday; Wall Street Journal, Closed-End Funds section under
the heading "World Income Funds"
every Monday; New York Times, Money and Business Section under
the heading "Closed-End Bond
Funds-World Income Funds"
every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its
common stock in the open market when it can do so at prices below the then
current net asset value per share.
[Dreyfus lion "d" logo]
DREYFUS STRATEGIC GOVERNMENTS
INCOME, 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 DISTRIBUTION AGENT
AND REGISTRAR
Mellon Bank, N.A.
85 Challenger Road
Ridgefield Park, NJ 07660
Printed in U.S.A. 854AR9511
[Dreyfus logo]
Strategic
Governments
Income, Inc.
Annual Report
November 30, 1995
