<PAGE>
Dreyfus
Growth and
Income Fund, Inc.
Semi-Annual
Report
April 30, 1998
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report for the Dreyfus Growth and
Income Fund, Inc. for the six-month period ended April 30, 1998. Over this
period, your Fund produced a total return of 18.26%,* while the Standard &
Poor's 500 Composite Stock Price Index (S&P 500) had a total return of
22.50%.** During the past six months, large-capitalization growth stocks have
continued to dominate the S&P 500. For example, an analysis of the S&P
500 based on size (market capitalization) and valuation (price-earnings
ratio) indicates that on average only a select portion of the S&P 500
actually outperformed the index. Ranked by capitalization, only the
top 10%, companies with market capitalizations greater than $45
billion, produced above-average results. Based on price-earnings ratios,
only the highest P/E ratio (top 20%) stocks outperformed. In
contrast, the Fund was invested in medium and large-
capitalization stocks with low price-earnings ratios.
While the Fund lagged the S&P 500, it was ahead of the average total
return for the Lipper Growth & Income Fund category, which was 17.39% for the
six-month period ended April 30, 1998.
As you may recall from my last letter, my management of the Fund began
in July 1997. I spent the latter half of calendar 1997 restructuring the
Fund to conform to my investment philosophy. Going forward, the Fund will
be primarily focused on investments in mid-to-large-capitalization
companies with above-average earnings growth prospects whose common
stock is selling at below-average price-earnings ratios.
Economic Review
Although real Gross Domestic Product (GDP) sustained a growth
trend approaching 4% into the first quarter, incoming evidence suggests a
shift to somewhat slower economic growth in coming months. Aggregate
profit margins already have begun to narrow in some sectors. The
conflicting pressures of a softening economy and a still-tightening
labor market have kept the Federal Reserve Board (the "Fed") in neutral,
although a bias favoring higher interest rates was resumed recently. Market
interest rates have likewise stayed within a narrow range in recent months.
While manufacturing has turned appreciably sluggish since year-end, this
was overshadowed in the first quarter by a strong rebound in domestic
demand. The industrial sector has been slowed by the strong dollar
and weak exports. However, with Asian economies still in turmoil,
competition from Asian-made imports has emerged only gradually. The first
quarter rebound in domestic demand was fueled primarily by strong housing
market conditions and rising real household incomes.
Rising real wages that have been such a boon to consumers in recent
months may also be taking a toll on corporate profit margins. The first sign
of profit pressure was seen last year as the dollar strengthened. This
year, profit margins have eroded further due to weak exports and
falling prices in some sectors. However, accelerating wage growth that is
apparent alongside limited pricing power may also prove a harbinger of
profit margin erosion. Hence, a shift to slower economic growth that
coexists with rising wage pressures creates a further risk to overall profit
growth.
The above pressures have kept Fed policy unchanged until now.
However, policymakers seem more concerned about wage growth than economic
strains, as evidenced by a recent shift towards a tightening bias. Although
long-term bond yields were below year-ago levels at the end of April,
substantially lower yields have proven difficult to attain in the absence of
lower short-term rates. This too could restrain the economic growth rate.
Market Overview
In the stock markets, large-capitalization growth stocks have continued
to lead the markets higher. As a result, our mid-to-large-capitalization
value process has not kept pace with the broad market averages like the S&P
500. As we write, we believe this situation is reversing and "value" stocks
are starting to outperform their growth counterparts. The one
<PAGE>
constant feature appears to be capitalization. Large-capitalization value stocks
are now leading the parade. While we may witness a seesaw battle between these
two basic investment styles and capitalization this year, we remain convinced
that our value process is appropriate over the longer term. We continue to
actively seek investments in companies whose earnings growth potential is
greater than and projected P/E ratio is less than the S&P 500.
Portfolio Focus
Equity investment results during the first six months were
positively impacted by two primary factors - financials and manufacturing
companies. The greatest impact came once again from the financial
holdings with Fannie Mae, Freddie Mac, Fleet Financial Group,
BankBoston and First Union producing outstanding results. In
manufacturing, Xerox, Tyco International, Armstrong
World Industries, Masco and AlliedSignal were strong performers.
Tyco International has been sold from the portfolio, as its P/E ratio became
too high to justify retention based on our low P/E approach.
On the other side of the ledger, issue selection and a mid-cap bias
hurt results. Although technology stocks (such as Adaptec and 3Com) were the
hardest hit, an assortment of stocks from varied industries (RJR Nabisco
Holdings, Georgia-Pacific, PacifiCare Health Systems, Cl. B and Pennzoil)
also registered negative results.
In the current equity environment (favoring large-capitalization
growth stocks) issue selection should be the key factor determining
investment success. We continue to find stocks that we believe have good
long-term earnings growth potential that are attractively priced relative
to the broad market average. An example of a recently purchased stock that
met our investment criteria is Tenet Healthcare. Tenet is the second-
largest investor-owned health care services company in the U.S., owning
or operating 131 acute-care hospitals and related health care facilities in
22 states. Recently purchased at a 20% P/E discount to the S&P 500, based on
1999 projected earnings, the company is expected to grow its earnings at
a 17% rate over each of the next two years and, longer term, more than
double the market's projected growth. Of course, as with any
investment, there are no guarantees and we will have to see what develops.
We are grateful for the opportunity to invest your capital and will
be working diligently on your behalf to achieve satisfying long-term
investment
results.
Sincerely,
/s/ Douglas Ramos
Douglas Ramos
Portfolio Manager
May 18, 1998 New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks--99.0% Shares Value
-------------- ---------------
<S> <C> <C>
Consumer Durables--1.7% Leggett & Platt............................... 690,700 $ 35,873,231
---------------
Consumer Non-Durables--6.1% Kimberly-Clark................................ 739,000 37,504,250
Philip Morris Cos............................. 859,000 32,051,438
RJR Nabisco Holdings.......................... 965,700 26,858,531
Warnaco Group, Cl. A.......................... 700,000 29,575,000
---------------
125,989,219
---------------
Electronic Technology--11.8% Adaptec....................................... 449,500 (a) 10,647,531
Gateway 2000.................................. 141,400 (a) 8,298,412
Lexmark International Group, Cl. A............ 848,600 (a) 49,112,725
Lockheed Martin............................... 334,000 37,199,250
Micron Technology............................. 250,000 (a) 7,765,625
Sunstrand..................................... 702,000 48,481,875
Texas Instruments............................. 414,000 26,521,875
Thiokol....................................... 160,000 8,620,000
United Technologies........................... 479,000 47,151,563
---------------
243,798,856
---------------
Energy Minerals--8.9% British Petroleum, A.D.S...................... 450,000 42,525,000
ENI S.p.A., A.D.S............................. 150,000 9,918,750
Houston Industries............................ 310,000 9,009,375
Mobil......................................... 500,000 39,500,000
Occidental Pertroleum......................... 200,000 5,887,500
Texaco........................................ 615,000 37,822,500
Tosco......................................... 1,080,000 38,475,000
---------------
183,138,125
---------------
Finance--19.0% BankBoston.................................... 375,000 40,476,562
CBL & Associates Property..................... 193,100 4,743,019
Chase Manhattan............................... 306,000 42,400,125
Chubb......................................... 438,000 34,574,625
Fannie Mae.................................... 727,000 43,529,125
First Union................................... 679,500 41,024,813
Fleet Financial Group......................... 515,000 44,483,125
Freddie Mac................................... 780,000 36,123,750
General Re.................................... 50,000 11,178,125
St. Paul Cos.................................. 166,400 14,102,400
Travelers Group............................... 669,000 40,934,437
Washington Mutual............................. 535,000 37,483,438
---------------
391,053,544
---------------
Health Services--5.1% Aetna......................................... 438,000 35,395,875
Beverly Enterprises........................... 2,683,000 (a) 42,257,250
PhyCor........................................ 1,200,000 (a) 27,300,000
---------------
104,953,125
---------------
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
-------------- ---------------
<S> <C> <C>
Health Technology--3.6% Biogen........................................ 826,000 (a) $ 36,653,750
Genzyme-General Division...................... 1,207,500 37,357,031
---------------
74,010,781
---------------
Process Industries--7.0% Archer-Daniels-Midland........................ 1,563,000 33,604,500
duPont (EI) deNemours......................... 388,000 28,251,250
Great Lakes Chemical.......................... 764,000 38,391,000
Praxair....................................... 855,300 43,032,281
---------------
143,279,031
---------------
Producer Manufacturing--11.1% AlliedSignal.................................. 904,000 39,606,500
Armstrong World Industries.................... 525,000 45,018,750
Deere & Co.................................... 350,000 20,453,125
General Signal................................ 945,000 41,580,000
Industrial Flexible Material.................. 725,000 (a,c) --
Masco......................................... 645,800 37,456,400
Xerox......................................... 385,300 43,731,550
---------------
227,846,325
---------------
Retail Trade--1.9% American Stores............................... 1,378,000 (a) 33,072,000
OfficeMax..................................... 300,000 (a) 5,643,750
--------------
38,715,750
---------------
Technology Services--2.3% First Data.................................... 1,378,993 46,713,388
---------------
Transportation--5.9% AMR........................................... 210,800 (a) 32,120,650
CNF Transportation............................ 704,500 (a) 27,211,313
Canadian Pacific.............................. 923,000 27,170,812
Wisconsin Central Transportation.............. 1,424,000 34,888,000
---------------
121,390,775
---------------
Utilities--14.6% AT&T.......................................... 562,000 33,755,125
Bell Atlantic................................. 410,000 38,360,625
Coastal....................................... 578,000 41,290,875
Duke Energy................................... 450,000 (a) 26,043,750
GTE........................................... 637,000 37,224,688
SBC Communications............................ 955,600 39,597,675
Telefonos de Mexico, Cl. L, A.D.S............. 652,000 36,919,500
Texas Utilities............................... 628,300 25,132,000
UGI........................................... 800,000 (a) 22,200,000
---------------
300,524,238
---------------
TOTAL COMMON STOCKS
(cost $1,748,614,954)...................... $2,037,286,388
===============
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Convertible Preferred Stocks--2% Shares Value
------------- ---------------
<S> <C> <C>
Finance; Sanwa International Finance, Cum., 1.25% (Units)
(cost $4,503,224).......................... 185 (b) $ 4,049,267
===============
Principal
Short-Term Investments--2.4% Amount
---------------
U.S. Treasury Bills: 4.92%, 7/23/1998.............................. $ 35,641,000 $ 35,243,246
4.89%, 7/30/1998.............................. 13,263,000 13,102,120
===============
TOTAL SHORT-TERM INVESTMENTS
(cost $48,337,333)......................... $ 48,345,366
===============
TOTAL INVESTMENTS ($1,801,455,511)............................................. 101.6% $ 2,089,681,021
====== ===============
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (1.6%) $ (32,826,012)
====== ===============
NET ASSETS..................................................................... 100.0% $ 2,056,855,009
====== ===============
</TABLE>
Notes to Statement of Investments:
- --------------------------
[FN]
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1998, this security amounted to $4,049,267 or approximately .2% of
net assets.
(c) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate value of zero represent approximately .0%
of net assets:
<TABLE>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation(*)
- ----- ---------- -------- ------------ ----------
<S> <C> <C> <C> <C>
Industrial Flexible Material.............. 3/31/1993 $5.00 0.00% zero
- ----------------------
(*) The valuation of this security has been determined in good faith under
the direction of the Board of Directors.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
-------------- --------------
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $1,801,455,511 $2,089,681,021
Cash............................................. 9,151,637
Receivable for shares of Common Stock subscribed. 4,011,389
Receivable for investment securities sold........ 3,865,782
Dividends receivable............................. 1,961,616
Net unrealized appreciation on forward currency
exchange contracts--Note 4(a)................... 175,069
Prepaid expenses................................. 159,755
---------------
2,109,006,269
---------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 1,532,422
Payable for shares of Common Stock redeemed...... 31,693,382
Payable for investment securities purchased...... 18,566,700
Accrued expenses................................. 358,756
---------------
52,151,260
---------------
NET ASSETS..................................................................... $2,056,855,009
===============
REPRESENTED BY: Paid-in capital.................................. $1,596,204,678
Accumulated undistributed investment income--net.. 7,969,660
Accumulated net realized gain (loss) on investments
and foreign currency transactions.............. 164,281,354
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 288,399,317
---------------
NET ASSETS..................................................................... $2,056,855,009
===============
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized)................ 103,927,758
NET ASSET VALUE, offering and redemption price per share....................... $19.79
=======
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Operations Six Months Ended April 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends (net of $47,498 foreign taxes
withheld at source)...................... $ 22,737,912
Interest 5,246,027
--------------
Total Income........................ $ 27,983,939
EXPENSES: Management fee--Note 3(a)................... 7,362,670
Shareholder servicing costs--Note 3(b)...... 3,333,481
Custodian fees--Note 3(b)................... 76,136
Prospectus and shareholders' reports....... 72,637
Directors' fees and expenses--Note 3(c)..... 40,910
Professional fees.......................... 18,642
Registration fees.......................... 6,043
Miscellaneous.............................. 10,145
--------------
Total Expenses........................ 10,920,664
-------------
INVESTMENT INCOME--NET.................................................... 17,063,275
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions (including foreign currency
transactions)......................... $142,834,906
Short sale transactions.................. 158,840
Net realized gain (loss) on financial futures 11,744,696
--------------
Net Realized Gain (Loss).............. 154,738,442
Net unrealized appreciation (depreciation)
on investments and foreign currency
transactions (including $6,765,580 net
unrealized appreciation on financial futures) 163,371,873
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 318,110,315
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $335,173,590
=============
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended
(Unaudited) October 31, 1997
--------------- ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 17,063,275 $ 33,665,240
Net realized gain (loss) on investments................................ 154,738,442 302,097,740
Net unrealized appreciation (depreciation) on investments.............. 163,371,873 (82,003,170)
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 335,173,590 253,759,810
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................. (10,524,338) (36,481,865)
Net realized gain on investments....................................... (295,927,118) (255,311,969)
--------------- ---------------
Total Dividends..................................................... (306,451,456) (291,793,834)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 466,842,033 3,234,126,408
Dividends reinvested................................................... 292,119,081 278,761,496
Cost of shares redeemed................................................ (643,236,721) (3,630,898,456)
--------------- ---------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... 115,724,393 (118,010,552)
--------------- ---------------
Total Increase (Decrease) in Net Assets.......................... 144,446,527 (156,044,576)
NET ASSETS:
Beginning of Period.................................................... 1,912,408,482 2,068,453,058
--------------- ---------------
End of Period.......................................................... $ 2,056,855,009 $ 1,912,408,482
=============== ===============
Undistributed investment income--net....................................... $ 7,969,660 $ 1,430,723
--------------- ---------------
CAPITAL SHARE TRANSACTIONS: Shares Shares
--------------- --------------
- -
Shares sold............................................................ 24,817,432 164,975,986
Shares issued for dividends reinvested................................. 16,802,668 15,539,230
Shares redeemed........................................................ (34,186,686) (184,787,972)
--------------- --------------
Net Increase (Decrease) in Shares Outstanding.................... 7,433,414 (4,272,756)
=============== ===============
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus Growth and Income 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.
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended October 31,
-------------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $19.82 $20.53 $17.96 $16.49 $16.86 $13.89
------- ------- ------- ------- ------- -------
Investment Operations:
Investment income--net............... .17 .34 .35 .44 .34 .38
Net realized and unrealized gain (loss)
on investments..................... 3.00 1.97 3.05 1.67 (.34) 2.95
------- ------- ------- ------- ------- -------
Total from Investment Operations...... 3.17 2.31 3.40 2.11 -- 3.33
------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net.. (.11) (.37) (.32) (.47) (.33) (.36)
Dividends from net realized gain
on investments.................... (3.09) (2.65) (.51) (.17) (.04) --
------- ------- ------- ------- ------- -------
Total Distributions................... (3.20) (3.02) (.83) (.64) (.37) (.36)
------- ------- ------- ------- ------- -------
Net asset value, end of period........ $19.79 $19.82 $20.53 $17.96 $16.49 $16.86
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN.................. 18.26%(1) 12.97% 19.41% 13.17% .05% 24.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets......................... .55%(1) 1.01% 1.02% 1.05% 1.14% 1.24%
Ratio of dividends on securities sold
short to average net assets........ -- .01% .01% .01% -- --
Ratio of net investment income to average
net assets......................... .86%(1) 1.67% 1.78% 2.55% 2.18% 2.92%
Decrease reflected in above expense ratios
due to undertakings by the Manager. -- -- -- -- -- .04%
Portfolio Turnover Rate............... 50.35%(1) 129.48% 131.30% 132.46% 97.47% 85.26%
Average commission rate paid (2)...... $.0567 $.0631 $.1073 -- -- --
Net Assets, end of period $2,056,855 $1,912,408 $2,068,453 $1,763,371 $1,717,733 $1,165,503
<FN>
- ---------------------
(1) Not annualized.
(2) For fiscal years beginning November 1, 1995, the Fund is required
to disclose its average commission rate paid per share for purchases and
sales of Investment securities.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Growth and Income Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company. The Fund's
investment objective is to provide investors with long-term
capital growth, current income and growth of income, consistent with
reasonable investment risk. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"). Premier
Mutual Fund Services, Inc. is the distributor of the Fund's shares, which are
sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
anagement estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (including options
and financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value
as determined in good faith under the direction of the Board of
Directors. Investments denominated in foreign currencies are translated
to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with
the net realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities, resulting from changes in exchange rates. Such
gains and losses are included with net realized and unrealized gain or loss
on investments.
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest
income, including, 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 are declared and paid on a
quarterly basis. Dividends from net realized capital
gain are normally declared
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in
the best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from substantially all Federal
income and excise taxes.
NOTE 2--Bank Lines of Credit:
The Fund may borrow up to $10 million for leveraging purposes
under a short-term unsecured line of credit and participates with other
Dreyfus-managed funds in a $100 million unsecured line of credit primarily
to be utilized for temporary or emergency purposes, including the
financing of redemptions. Interest is charged to the Fund at rates which
are related to the Federal Funds rate in effect at the time of borrowings.
During the period ended April 30, 1998, the Fund did not borrow under
either line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .75 of 1% of the value of the Fund's
average daily net assets and is payable monthly.
(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 April 30, 1998, the Fund
was charged $2,454,223 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 April 30, 1998, the Fund was charged $579,704
pursuant to the transfer agency agreement.
The Fund compensates Mellon under a custody agreement to provide
custodial services for the Fund. During the period ended April 30, 1998,
the Fund was charged $76,136 pursuant to the custody agreement.
(c) 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.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales
of investment securities and securities sold short, excluding
short-term securities, financial futures and forward currency exchange
contracts during the period ended April 30, 1998:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Long transactions.................................................... $958,108,352 $933,387,723
Short sale transactions.............................................. 1,285,349 --
-------------- --------------
Total.......................................................... $959,393,701 $933,387,723
============== ==============
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value.
The Fund would incur a loss if the price of the security increases between
the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates. Until the Fund replaces the
borrowed security, the Fund will maintain daily, a segregated account with
a broker and custodian, of cash and/or U.S. Government securities sufficient to
cover its short position. At April 30, 1998, there were no securities sold
short outstanding.
The following summarizes open forward currency exchange contracts at
April 30, 1998:
<TABLE>
<CAPTION>
Foreign
Currency Unrealized
Forward Currency Exchange Contracts Amounts Proceeds Value Appreciation
--------------------------------- -------- -------- ------ ------------
Sales:
-----
<S> <C> <C> <C> <C>
Japanese Yen, expiring 5/18/98 183,150,000 $1,439,236 $1,382,551 $ 56,685
Japanese Yen, expiring 5/18/98 382,500,000 3,005,776 2,887,392 118,384
----------
Total $ 175,069
==========
</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 those dates. The Fund is also
exposed to credit risk associated with counter party nonperformance on these
forward currency exchange contracts which is typically limited to the
unrealized gain on each open contract.
<PAGE>
Dreyfus Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. 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 received or made 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 April 30, 1998, there were no financial
futures contracts outstanding.
(b) At April 30, 1998, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $288,400,579,
consisting of $329,903,600 gross unrealized appreciation and $41,503,021
gross unrealized depreciation.
At April 30, 1998, 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).
<PAGE>
Dreyfus Growth and Income Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon BankCenter
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 010SA984
