LETTER TO SHAREHOLDERS
Dear Shareholder:
This past year was an extremely difficult year for all financial markets,
but assuredly it was most difficult on fixed-income investments. The sharp
rise in interest rates that began in late 1993 continued right through 1994.
Investors' fear of inflation was the primary cause; it was this same fear of
inflation that caused the Federal Reserve Board to tighten interest rates six
times over the course of 1994. The 30-year Treasury bond was yielding 6.42%
on January 3, 1994; by December 30, 1994 it was yielding 7.88%. Long-term
rates were not the only casualty: on those same respective dates the 2-year
Treasury note was yielding 4.32%, and then 7.70%.
As mentioned, the primary reason for the Federal Reserve to raise rates
was fear of an economy moving too fast and thereby causing inflation. To
date, inflation, as measured by the Consumer Price Index, has remained
steady, and after the past rate hikes, we expect it to remain so. We believe
the Federal Reserve, by acting to limit inflation, has made 1995 more
attractive for fixed-income investors. Right now, the yield of Treasury
securities minus the rate of inflation, otherwise known as the "real rate of
return," is at a historic high.
We have said that 1994 was a difficult year, and your Fund's returns were
impaired by these higher rates. The total return for Dreyfus Short-Term
Income Fund, Inc. for the six months ended January 31, 1995 was .81%.* It is
some consolation that your Fund provided a steady flow of income even though
the net asset value declined. The annualized distribution rate per share for
the six months ended January 31, 1995 was 7.51%.**
We are more optimistic about 1995. In our view, the prospective real rate
of return for Treasury securities makes fixed-income investment attractive.
Additionally, Federal Reserve tightenings have a six- to nine-month lag
before the slowing effects on the economy caused by higher interest rates are
apparent. The results of the Federal Reserve's vigilance should be evident by
the end of the first quarter of 1995. We further believe that the Federal
Reserve is close to the end of its tightening for this cycle, with possibly
two more moves in 1995. These final moves, in our opinion, would forestall
any chances of a serious rise in inflation.
Furthermore, signs of a slowdown have already appeared. Christmas season
shopping was lackluster for the most part. Auto sales, which represent a
significant amount of Gross Domestic Product, are slowing. Finally, exports,
while poised to fare better, will have difficulties because our major trading
partners (Mexico, Canada, etc.) are having currency and market difficulties.
As you know from our last letter, we positioned your Fund defensively,
keeping it at approximately a two-year average maturity. Currently, we are
just below a three-year average maturity, and as we move forward we will look
to remain at that level as our positive view of the market comes to fruition.
As we also mentioned in our last letter, we moved out of lower quality
securities, and into higher quality securities. Asset-backed securities,
which carry an "AAA" rating, in 1994 represented about 14% of the Fund's
portfolio. As we move forward, we believe we can move out of the "AAA"
asset-backed securities, and into other securities rated "A" or above that
will perform well in 1995 (to take advantage of our more positive
expectations for this year).
It should be noted that while we did have a small position in Mexican
bonds, we moved out of them before the Mexican crisis began. We are currently
holding about 3% in Argentinian bonds; while we feel that Argentina is
inherently different from Mexico, and does not suffer from the same ailments,
we are currently reviewing that investment also. Some of the credits that
your Fund has used to advantage are companies like Chrysler, Ford, Delta
Airlines, American Airlines, etc. We are constantly reviewing different
sectors in the market and will make the adjustments we feel necessary (i.e.,
airline securities are becoming quite expensive, while automobile securities,
even with a slowing economy, in our opinion still have more upside/upgrade
potential).
In closing, we want to thank you for remaining steadfast in your Fund,
and you can be assured that we will continue our goal to provide an
attractive long-term quality fund.
Sincerely,
(Gerald E. Thunelius Signature Logo)
Gerald E. Thunelius
Portfolio Manager
February 6, 1995
New York, N.Y.
* Total return represents the change in value during the period in a
hypothetical account with dividends reinvested.
** Annualized distribution rate per share is based upon dividends per
share paid from net investment income during the period, divided by the
net asset value per share at the end of the period.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS JANUARY 31, 1995 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES--94.5% AMOUNT VALUE
-------------- -------------
<S> <C> <C> <C>
BANKING--4.3% Chemical Banking,
Sub. Notes, 10 3/8%, 1999............ $ 2,300,000 $ 2,468,555
International Bank for Reconstruction and
Development, Notes, 9 7/8%, 1997..... 6,500,000 6,852,963
--------------
9,321,518
--------------
CONSUMER--2.7% Federated Department Stores,
Sr. Notes, 10%, 2001................. 4,000,000 4,050,000
Safeway,
Sr. Medium-Term Notes, Ser. B, 8.07%, 1997 2,000,000 (a) 1,962,320
--------------
6,012,320
--------------
CONSUMER/
ENTERTAINMENT--3.8% Circus Circus Enterprises,
Sr. Sub. Notes, 10 5/8%, 1997........ 5,000,000 5,252,465
Time Warner,
Notes, 6.05%, 1995................... 3,000,000 (a) 2,981,040
--------------
8,233,505
--------------
FINANCE--14.9% Bear Stearns Cos.,
Sr. Notes, 5 7/8%, 1996.............. 3,000,000 2,955,525
Ford Motor Credit:
Medium-Term Notes, 9.07%, 1996....... 7,000,000 7,125,930
Medium-Term Floating Rate Notes, 6.555%, 1997 5,000,000 (b) 5,012,500
GATX Capital,
Medium-Term Notes, Ser. C, 10%, 1996. 5,000,000 5,095,330
International Lease Finance,
Medium-Term Notes, Ser. E, 6.47%, 1997 4,000,000 3,910,744
SAFECO,
Notes, 10 3/4%, 1995................. 3,500,000 3,580,650
Sears Overseas Finance N.V.,
Notes (Gtd. by Sears, Roebuck and Co.),
Zero Coupon, 1998.................... 6,500,000 4,985,500
--------------
32,666,179
--------------
FINANCE/
ASSET BACKED--14.2% Case Equipment Loan Trust,
Asset Backed Notes,
Ser. 1994-C, Cl. A-1, 7.60%, 1997.... 4,811,276 4,799,248
IBM Credit Receivables Lease Asset Master Trust,
Lease Backed Ctfs.,
Ser. 1994-l, Cl. A-2, 6.55%, 2001.... 5,000,000 4,882,813
Navistar Financial Owner Trust,
Asset Backed Notes,
Ser. 1994-C, Cl. A-1, 7.65%, 1997.... 4,623,439 4,636,443
Premier Auto Trust,
Asset Backed Notes:
Ser. 1994-4, Cl. A-3, 6.20%, 1999 7,250,000 7,136,719
Ser. 1994-4, Cl. A-4, 6.45%, 1998 5,000,000 4,881,250
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
-------------- --------------
FINANCE/
ASSET BACKED(CONTINUED) World Omni Automobile Lease Securitization
Trust, Automobile Lease Asset Backed Ctfs.,
Ser. 1994-A, Cl. A, 6.45%, 2000...... $ 5,000,000 $ 4,903,000
--------------
31,239,473
--------------
INDUSTRIAL--21.1% Alco Capital Resource,
Medium-Term Notes, Ser. A, 8.04%, 1997 5,000,000 5,012,750
Caterpillar Financial Services,
Medium-Term Notes, Ser. E, 8.16%, 1999 10,000,000 10,018,900
Deere and Co.,
Notes, 8 1/4%, 1996.................. 3,600,000 3,633,469
Federal Express,
Sr. Notes, 9 3/4%, 1996.............. 1,000,000 1,023,397
Inland Steel,
First Mortgage Bonds, Ser. T, 12%, 1998 1,000,000 1,070,000
McDermott,
Notes, 10 1/4%, 1995................. 2,000,000 2,020,062
McDonnell Douglas,
Notes, 8 5/8%, 1997.................. 3,643,000 3,686,217
Philip Morris Cos.,
Notes, 9 3/4%, 1997.................. 1,000,000 1,037,525
Schering-Plough,
Notes, Zero Coupon, 1996............. 10,200,000 (a) 8,920,920
Stone Container, Sr. Sub. Notes:
10 3/4%, 1997........................ 2,000,000 2,037,500
11%, 1999............................ 3,000,000 2,966,250
USX,
Medium-Term Floating Rate Notes,
7 1/8%, 1996......................... 5,000,000 (b) 5,015,600
--------------
46,442,590
--------------
TRANSPORTATION--5.3% Delta Air Lines, Medium-Term Notes:
Ser. B, 7.79%, 1998.................. 4,449,000 4,259,473
8.05%, 1998.......................... 2,500,000 2,417,325
Ryder System,
Medium-Term Notes, Ser. 10, 7 3/4%, 1996 5,000,000 5,007,950
--------------
11,684,748
--------------
UTILITIES--3.7% Texas Gas Transmission,
Notes, 9 5/8%, 1997.................. 3,350,000 3,366,750
Triton Energy,
Sr. Sub. Discount Notes, Zero Coupon, 1997 6,500,000 4,842,500
--------------
8,209,250
--------------
FOREIGN--8.3% Bundesrepublik Deutschland,
Ser. 99, 8%, 1997.................... 3,280,840 (c) 3,378,280
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
-------------- --------------
FOREIGN (CONTINUED) Central Termica Guemes,
Notes, 12%, 1996..................... $ 10,000,000 (a) $ 9,200,000
Ford Motor Credit,
Medium-Term Notes, 10 3/8%, 1996..... 3,551,893 (d) 3,611,920
New Zealand Government Bonds,
9%, 1996............................. 1,913,100 (e) 1,904,873
--------------
18,095,073
--------------
U.S. GOVERNMENT AGENCY/
MORTGAGE BACKED--.7% Federal Home Loan Mortgage Corp.,
Multi-Class Mortgage Participation Ctfs.,
Ser. 1350, Cl. 1350-C, 5.65%, 2011... 1,468,466 1,455,030
--------------
U.S. GOVERNMENTS--15.5%. U.S. Treasury Bonds:
11 1/2%, 11/15/1995.................. 3,500,000 3,626,875
11 5/8%, 11/15/2004.................. 6,800,000 8,632,811
U.S. Treasury Notes:
11 1/4%, 2/15/1995................... 10,000,000 10,018,750
7 3/4%, 1/31/2000.................... 10,000,000 10,092,190
U.S. Treasury Principal Strips,
Zero Coupon, 11/15/2004.............. 3,400,000 1,615,748
--------------
33,986,374
--------------
TOTAL BONDS AND NOTES
(cost $212,132,607).................. $207,346,060
==============
SHORT-TERM INVESTMENTS--1.4%
TIME DEPOSITS: Chemical Bank (London),
5 7/8%, 2/1/1995..................... $ 151,000 $ 151,000
Republic National Bank (London),
5 3/4%, 2/1/1995..................... 2,900,000 2,900,000
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,051,000).................... $ 3,051,000
==============
TOTAL INVESTMENTS (cost $215,183,607) ............................. 95.9% $210,397,060
====== ==============
CASH AND RECEIVABLES (NET) ......................................... 4.1% $ 8,881,450
====== ==============
NET ASSETS.................................................................. 100.0% $219,278,510
====== =============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At January 31,
1995, these securities amounted to $23,064,280 or 10.5% of net assets.
(b) Variable rate security-interest rate subject to periodic change.
(c) Denominated in German Deutsche Marks.
(d) Denominated in Canadian Dollars.
(e) Denominated in New Zealand Dollars.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $215,183,607)-see statement..................................... $210,397,060
Cash.................................................................... 5,507,620
Receivable for investment securities sold............................... 9,349,988
Interest receivable..................................................... 3,358,222
Receivable for subscriptions to Common Stock............................ 50,000
Prepaid expenses ....................................................... 26,669
--------------
228,689,559
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 58,647
Due to Distributor...................................................... 2,211
Payable for investment securities purchased............................. 8,880,142
Payable for Common Stock redeemed....................................... 375,420
Accrued expenses........................................................ 94,629 9,411,049
------------ --------------
NET ASSETS ................................................................ $219,278,510
==============
REPRESENTED BY:
Paid-in capital......................................................... $239,807,023
Accumulated undistributed investment income-net......................... 54,633
Accumulated net realized (loss) on investments.......................... (15,796,599)
Accumulated net unrealized (depreciation) on investments-Note 3......... (4,786,547)
--------------
NET ASSETS at value applicable to 18,913,199 outstanding shares of
Common Stock, equivalent to $11.59 per share
(500 million shares of $.001 par value authorized)...................... $219,278,510
==============
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 9,794,611
EXPENSES:
Management fee-Note 2(a).............................................. $ 615,005
Shareholder servicing costs-Note 2(b)................................. 410,857
Prospectus and shareholders' reports-Note 2(b)........................ 48,049
Registration fees..................................................... 29,049
Custodian fees........................................................ 26,038
Directors' fees and expenses-Note 2(c)................................ 13,556
Professional fees..................................................... 10,022
Miscellaneous......................................................... 15,066
--------------
1,167,642
Less_expense reimbursement from Manager due to
undertakings_Note 2(a)............................................ 539,154
--------------
TOTAL EXPENSES.................................................. 628,488
------------
INVESTMENT INCOME--NET.......................................... 9,166,123
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(10,273,752)
Net unrealized appreciation on investments.............................. 3,010,325
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (7,263,427)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 1,902,696
============
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
JULY 31, JANUARY 31, 1995
1994 (UNAUDITED)
-------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................ $ 19,445,054 $ 9,166,123
Net realized (loss) on investments................................ (5,611,159) (10,273,752)
Net unrealized appreciation (depreciation) on investments for the period (8,144,668) 3,010,325
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 5,689,227 1,902,696
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................. (19,394,002) (9,204,306)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 340,428,554 46,340,814
Dividends reinvested.............................................. 16,377,882 7,426,336
Cost of shares redeemed........................................... (271,809,975) (104,215,134)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 84,996,461 (50,447,984)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 71,291,686 (57,749,594)
NET ASSETS:
Beginning of period............................................... 205,736,418 277,028,104
-------------- --------------
End of period (including undistributed investment income_net: $92,816
in 1994 and $54,633 in 1995).................................... $277,028,104 $219,278,510
============== ============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 27,511,855 3,951,775
Shares issued for dividends reinvested............................ 1,337,198 633,976
Shares redeemed................................................... (22,144,923) (8,877,174)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING................... 6,704,130 (4,291,423)
============== ============
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM 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.
SIX MONTHS ENDED
YEAR ENDED JULY 31, JANUARY 31, 1995
-----------------------
PER SHARE DATA: 1993(1) 1994 (UNAUDITED)
------- ------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period....................... $12.50 $12.47 $11.94
------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net...................................... .89 .84 .44
Net realized and unrealized (loss) on investments.......... (.01) (.54) (.35)
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS......................... .88 .30 .09
------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net....................... (.89) (.83) (.44)
Dividends from net realized gain on investments............ (.02) -- --
------- ------- -------
TOTAL DISTRIBUTIONS...................................... (.91) (.83) (.44)
------- ------- -------
Net asset value, end of period............................. $12.47 $11.94 $11.59
======= ======= =======
TOTAL INVESTMENT RETURN 7.68%(2) 2.47% 1.61%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................... -- .24% .51%(2)
Ratio of net investment income to average net assets....... 7.58%(2) 6.79% 7.45%(2)
Decrease reflected in above expense ratios due to undertakings
by the Manager........................................... 1.12%(2) .71% .44%(2)
Portfolio Turnover Rate.................................... 54.59%(3) 74.90% 295.59%(3)
Net Assets, end of period (000's Omitted).................. $205,736 $277,028 $219,279
</TABLE>
----------------------
(1) From August 18, 1992 (commencement of operations) to July 31, 1993.
(2) Annualized.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
DREYFUS SHORT-TERM INCOME FUND, 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 open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgement 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 investments (which constitute a majority of the portfolio 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. Investments in U.S. Government obligations are
valued at the mean between quoted bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(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: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. 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.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise 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 .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the
DREYFUS SHORT-TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Fund's aggregate expenses, exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of
expenses in any full fiscal year that such expenses (exclusive of
distribution expenses and certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 million and 1 1/2% of the excess
over $100 million of the average value of the Fund's net assets in accordance
with California "blue-sky" regulations. However, the Manager had undertaken
from August 1, 1994 through January 30, 1995, to reduce the management fee
paid by the Fund, to the extent of the Fund's aggregate expenses (exclusive
of certain expenses as described above) exceeded specified annual percentages
of the Fund's average daily net assets. The Manager has currently undertaken
from January 31, 1995 through March 31, 1995, or until such time as the net
assets of the Fund exceed $350 million, regardless of whether they remain at
that level, to waive receipt of the management fee payable to it by the Fund
in excess of an annual rate of .20 of 1% of the Fund's average daily net
assets. The expense reimbursement, pursuant to the undertakings, amounted to
$539,154 for the six months ended January 31, 1995.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) On August 4, 1994, Fund shareholders approved a revised Service Plan
(the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts and (b) pays the Manager, Dreyfus Service
Corporation or any affiliate (collectively "Dreyfus") for advertising and
marketing relating to the Fund and servicing shareholders accounts, at an aggr
egate annual rate of .20 of 1% of the value of the Fund's average daily net
assets. Each of the Distributor and Dreyfus may pay Service Agents (a
securities dealer, financial institution or other industry professional) a
fee in respect of the Fund's shares owned by shareholders with whom the
Service Agent has a servicing relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and Dreyfus
determines the amounts to be paid to Service Agents to which it will make
payments and the basis on which such payments are made. The Plan also
separately provides for the Fund to bear the costs of preparing, printing and
distributing certain of the Fund's prospectuses and statements of additional
information and costs associated with implementing and operating the Plan,
not to exceed the greater of $100,000 or .005 of 1% of the Fund's average
daily net assets for any full fiscal year.
Prior to August 24, 1994, the Fund's Service Plan ("prior Service Plan")
provided that the Fund pay Dreyfus Service Corporation at an annual rate of
.20 of 1% of the value of the Fund's average daily net assets, for costs and
expenses in connection with advertising, marketing and distributing the
Fund's shares and for servicing shareholder accounts. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's shares owned by clients of the Service Agent. The prior Service
Plan also separately provided for the Fund to bear the cost of preparing,
printing and distributing certain of the Fund's prospectuses and statements
of additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005 of 1% of
the Fund's average daily net assets for any full fiscal year.
During the six months ended January 31, 1995, $245,996 was chargeable to
the Fund pursuant to the Plan, and $43,686 was charged pursuant to the prior
Service Plan.
DREYFUS SHORT-TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $250 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of securities, other than
short-term securities, during the six months ended January 31, 1995 amounted
to $669,423,104 and $735,457,141, respectively.
At January 31, 1995, accumulated net unrealized depreciation on
investments was $4,786,547 consisting of $429,599 gross unrealized
appreciation and $5,216,146 gross unrealized depreciation.
At January 31, 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).
DREYFUS SHORT-TERM INCOME FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS SHORT-TERM INCOME FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Short-Term Income Fund, Inc., including the statement of investments,
as of January 31, 1995, and the related statements of operations and changes
in net assets and financial highlights for the six month period ended January
31, 1995. 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
July 31, 1994 and financial highlights for each of the two years in the
period ended July 31, 1994 and in our report dated September 8, 1994, we
expressed an unqualified opinion ended on such statement of changes in net
assets and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
March 7, 1995
(Dreyfus `D' Logo)
DREYFUS SHORT-TERM INCOME FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 083SA951
(Dreyfus Logo)
Short-Term Income
Fund, Inc.
Semi-Annual
Report
January 31, 1995
(Dreyfus lion Logo)
