DREYFUS SHORT-TERM INCOME FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The fixed income markets have come almost full circle since our last
correspondence. In our letter dated February 6, 1995, we stated our positive
outlook for 1995. In accordance with this increased optimism, we extended
the average maturity of your Fund. The Dreyfus Short-Term Income Fund has
been maintaining its maximum maturity average of three years for most of 1995
- -- a maturity structure that has benefited the Fund greatly. It is with
pleasure that we are able to report a total return of 7.05% for the one-year
period ended July 31, 1995.*
We stated in our last correspondence, "We are more optimistic about 1995.
In our view, the prospective real rate of return for Treasury securities
makes fixed income investment attractive." This optimism has come to
fruition. While we still maintain a favorable outlook and believe the
Federal Reserve Board will have to loosen what we see as a tight monetary
policy, the market is currently somewhat ahead of fundamentals. At this
time, we feel it is premature to anticipate an extreme number of interest
rate moves by the Fed.
Fundamentally, our views remain consistent with a slowing, low-inflation
economy. As always, we are seeking out securities that represent the best
value within your Fund's Prospectus guidelines. The Fund made significant
changes in its quality structure, moving from lower quality credits (e.g.,
airline, auto sectors) to higher quality credits (e.g., consumer/beverage,
finance sectors). This striving for higher credit quality is still in
effect; as of July 31, 1995, your Fund was holding 17% in AA/Aa, 48% in A/A,
14% in BBB/Baa and 1% in BB/Ba (compared to just three months earlier on
April 30, 1995, when AA/Aa was 4%, A/A was 42%, BBB/Baa was 21% and BB/Ba was
2%).
The sector composition of the Fund has been much more difficult to
adjust. In our opinion, most sectors are too expensive; the risk premium an
investor is paid for owning lower-grade credits is not enough (e.g., Delta
Airline, McDonnell Douglas). There are two sectors that offer value in our
opinion: mortgages and cable/media. We have recently added Fannie Mae
mortgage-backed securities to the Fund. Fannie Mae securities are guaranteed
as to the timely payment of principal and interest by the Fannie Mae agency
and not by the U.S. Government. Therefore, the risk premium over Treasuries
is very significant. Ideally we anticipate holding 10% of the portfolio in
this sector. The second sector (cable/media) is much more difficult and
volatile, and security selection must be approached carefully. We are
holders of Time Warner bonds, and may add other companies of this sector to
our position if the right maturity becomes available. (We prefer a 2-3 year
maturity, which is difficult to find.)
Because the Fund does not use any risky investment techniques such as
investments in derivatives or speculative trading, it is important that we
constantly reassess what securities represent the best value, and adjust your
Fund accordingly.
In closing, we thank you for investing in the Dreyfus Short-Term Income
Fund, Inc. We want to assure you that we will remain steadfast in our goal
of continuing to provide you with an attractive quality Fund.
Sincerely,
Gerald E. Thunelius
Portfolio Manager
September 8, 1995
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
DREYFUS SHORT-TERM INCOME FUND, INC. JULY 31, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS SHORT-TERM
INCOME FUND, INC. AND THE MERRILL LYNCH CORPORATE AND GOVERNMENT MASTER
INDEX
Dollars
$11,773
Dreyfus Short-Term
Income Fund
$11,672
Merrill Lynch Corporate
and Government
Master Index*
*Source: Merrill Lynch
AVERAGE ANNUAL TOTAL RETURN
ONE YEAR ENDED FROM INCEPTION (8/18/92)
JULY 31, 1995 TO JULY 31, 1995
--------------------- --------------------------
7.05% 5.68%
Past performance is not predictive of future results.
The above graph compares a $10,000 investment made in the Dreyfus Short-Term
Income Fund on 8/18/92 (Inception Date) to a $10,000 investment made in the
Merrill Lynch Corporate and Government Master Index on that date. All
dividends and capital gain distributions are reinvested.
The Fund invests primarily in debt securities and securities with debt-like
characteristics, and maintains a dollar-weighted average maturity of three
years or less. The Fund's performance takes into account fees and expenses.
Unlike the Fund, the Merrill Lynch Corporate and Government Master Index is
an unmanaged performance benchmark for investment grade corporate securities
and government securities with maturities greater than or equal to one year,
but no longer than 4.99 years; issues in the Index must have par amounts
outstanding greater than or equal to $25 million. The Index does not take
into account fees and expenses. Further information relating to Fund
performance including any expense reimbursements, if applicable, is contained
in the Condensed Financial Information section of the Prospectus and
elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
BONDS AND NOTES-99.0% AMOUNT VALUE
------------------- ----------------
<S> <C> <C>
BANKING-3.7%............ Capital One Bank,
Notes, 8 1/8%, 2000......................... $ 5,000,000 $ 5,207,925
Chemical Banking,
Sub. Notes, 10 3/8%, 1999................... 2,300,000 2,564,068
--------------
7,771,993
--------------
BROKERAGE-1.4%.......... Bear Stearns Cos.,
Sr. Notes, 5 7/8%, 1996..................... 3,000,000 2,995,812
--------------
CONSUMER-9.6%........... Bass America,
Gtd. Notes, 6 3/4%, 1999.................... 1,000,000 1,006,224
Coca-Cola Enterprises,
Notes, 6 1/2%, 1997......................... 6,100,000 6,133,172
Federal Express,
Sr. Notes, 9 3/4%, 1996..................... 1,000,000 1,026,654
IBM,
Notes, 6 3/8%, 1997......................... 5,000,000 5,019,680
PepsiCo,
Notes, 7%, 1996............................. 5,000,000 5,052,015
Safeway,
Sr. Medium-Term Notes, Ser. B, 8.07%, 1997.. 2,000,000(a) 2,033,660
--------------
20,271,405
--------------
ENTERTAINMENT-4.9%...... Time Warner,
Notes, 7.95%, 2000.......................... 5,000,000 5,114,650
Walt Disney,
Notes, 8%, 1997............................. 5,000,000 5,250,000
--------------
10,364,650
--------------
FINANCE-21.7%........... Fleet Financial Group,
Sr. Notes, 7 1/8%, 2000..................... 5,000,000 5,081,720
GATX Capital,
Medium-Term Notes, Ser. C, 10%, 1996........ 5,000,000 5,071,340
General Electric Capital,
Medium-Term Notes, Ser. A, 7 1/2%, 1998..... 10,000,000 10,307,050
General Motors Acceptance,
Medium-Term Notes, 7.35%, 1997.............. 8,050,000 8,181,706
International Lease Finance,
Medium-Term Notes, Ser. E, 6.47%, 1997...... 4,000,000 4,016,456
SAFECO,
Notes, 10 3/4%, 1995......................... 3,500,000 3,518,438
USL Capital,
Sr. Notes, 8 1/8%, 2000...................... 5,000,000 5,264,655
U. S. Leasing International,
Sr. Notes, 8 3/4%, 2001..................... 3,800,000 4,149,091
--------------
45,590,456
--------------
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
--------------- ----------------
INDUSTRIAL-25.0% Alco Capital Resource, Medium-Term Notes:
Ser. A, 8.04%, 1997......................... $ 5,000,000 $ 5,141,390
Ser. A, 6.99%, 2000......................... 3,000,000 3,023,475
Caterpillar Financial Services,
Medium-Term Notes, Ser. E, 8.16%, 1999...... 10,000,000 10,484,820
Deere & Co.,
Notes, 8 1/4%, 1996......................... 3,600,000 3,663,976
Ingersoll-Rand, Medium-Term Notes:
Ser. A, 6.24%, 1997......................... 5,000,000 5,002,150
Ser. A, 6.42%, 1998.......................... 9,000,000 9,000,900
John Deere Capital, Medium-Term Notes:
Ser. B, 7.37%, 2000......................... 5,000,000 5,144,400
Ser. B, 7.91%, 2000.......................... 5,750,000 6,032,906
PACCAR Financial,
Medium-Term Notes, Ser. F, 7.20%, 1999...... 5,000,000 5,105,695
--------------
52,599,712
--------------
INSURANCE-7.9% Associates Corp. of North America,
Medium-Term Sr. Notes:
Ser. G, 7.05%, 1997......................... 6,205,000 6,289,220
Ser. G, 7 5/8%, 2000........................ 5,350,000 5,543,354
SunAmerica,
Medium-Term Notes, 6.26%, 2001............. 5,000,000 4,844,800
--------------
16,677,374
--------------
TRANSPORTATION-4.9%..... FINOVA Capital,
Notes, 8%, 2000............................. 5,000,000 5,225,285
Ryder System,
Medium-Term Notes, Ser. 10, 7 3/4%, 1996.... 5,000,000 5,068,960
--------------
10,294,245
--------------
FOREIGN/
GOVERNMENTAL-6.6%.... Canada Government Bonds,
6 1/2%, 2000................................ 10,000,000 10,052,000
Ford Motor Credit,
Medium-Term Notes, 10 3/8%, 1996............ 3,656,307(b) 3,759,780
--------------
13,811,780
--------------
U.S. GOVERNMENT Federal Home Loan Banks, Consolidated Bonds:
AND AGENCIES-13.3%...... Ser. PL, 5.84%, 6/22/1998................... 9,000,000 8,926,875
5.77%, 6/29/1998............................ 5,000,000 4,951,565
U.S. Treasury Notes:
9 1/4%, 1/15/1996........................... 10,750,000 10,916,292
8 7/8%, 11/15/1997.......................... 2,500,000 2,653,907
9 1/8%, 5/15/1999........................... 500,000 550,000
--------------
27,998,639
--------------
TOTAL BONDS AND NOTES
(cost $206,791,144)......................... $208,376,066
==============
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
SHORT-TERM INVESTMENT-1.9% AMOUNT VALUE
---------------- ---------------
TIME DEPOSIT; Chemical Bank (London),
5 7/8%, 8/1/1995
(cost $4,062,000)............... $ 4,062,000 $ 4,062,000
==============
TOTAL INVESTMENTS (cost $210,853,144)........................................................... 100.9% $212,438,066
================ ==============
LIABILITIES, LESS CASH AND RECEIVABLES (.9%) $ (1,914,024)
================ ==============
NET ASSETS...................................................................................... 100.0% $210,524,042
================ ==============
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
July 31, 1995, these securities amounted to $2,033,660 or 1.0% of net
assets.
(b) Denominated in Canadian Dollars.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $210,853,144)-see statement..................................... $212,438,066
Cash.................................................................... 709,588
Interest receivable..................................................... 4,006,535
Receivable for subscriptions to Common Stock............................ 1,000
Prepaid expenses ....................................................... 43,383
---------------
217,198,572
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 98,841
Due to Distributor...................................................... 2,493
Payable for investment securities purchased............................. 5,000,000
Dividends Payable....................................................... 1,174,412
Payable for Common Stock redeemed....................................... 313,244
Accrued expenses........................................................ 85,540 6,674,530
--------------- ---------------
NET ASSETS.................................................................. $210,524,042
===============
REPRESENTED BY:
Paid-in capital......................................................... $225,544,579
Accumulated undistributed investment income-net......................... 110,728
Accumulated net realized (loss) on investments.......................... (16,716,187)
Accumulated net unrealized appreciation on investments-Note 3........... 1,584,922
---------------
NET ASSETS at value applicable to 17,710,612 shares outstanding
(500 million shares of $.001 par value Common Stock authorized)......... $210,524,042
===============
NET ASSET VALUE, offering and redemption price per share
($210,524,042 / 17,710,612 shares)...................................... $11.89
========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 18,200,290
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,156,674
Shareholder servicing costs-Note 2(b)................................. 784,942
Prospectus and shareholders' reports-Note 2(b)........................ 62,336
Registration fees..................................................... 49,701
Custodian fees........................................................ 49,504
Professional fees..................................................... 29,808
Directors' fees and expenses-Note 2(c)................................ 29,610
Miscellaneous......................................................... 24,075
--------------
2,186,650
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 785,529
--------------
TOTAL EXPENSES.................................................. 1,401,121
--------------
INVESTMENT INCOME-NET........................................... 16,799,169
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(11,193,340)
Net unrealized appreciation on investments.............................. 9,381,794
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (1,811,546)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $14,987,623
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-TERM INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
---------------------------------
1994 1995
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 19,445,054 $ 16,799,169
Net realized (loss) on investments...................................... (5,611,159) (11,193,340)
Net unrealized appreciation (depreciation) on investments for the year.. (8,144,668) 9,381,794
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 5,689,227 14,987,623
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................... (19,394,002) (16,781,257)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 340,428,554 79,943,038
Dividends reinvested.................................................... 16,377,882 12,577,109
Cost of shares redeemed................................................. (271,809,975) (157,230,575)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... 84,996,461 (64,710,428)
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 71,291,686 (66,504,062)
NET ASSETS:
Beginning of year....................................................... 205,736,418 277,028,104
--------------- ---------------
End of year (including undistributed investment income--net: $92,816 in 1994
and $110,728 in 1995).................................................... $ 277,028,104 $ 210,524,042
=============== ===============
SHARES SHARES
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 27,511,855 6,812,455
Shares issued for dividends reinvested.................................. 1,337,198 1,071,488
Shares redeemed......................................................... (22,144,923) (13,377,953)
--------------- ---------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 6,704,130 (5,494,010)
=============== ===============
See notes to financial statements.
</TABLE>
<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 year indicated. This information
has been derived from the Fund's financial statements.
YEAR ENDED JULY 31,
---------------------------------
PER SHARE DATA: 1993(1) 1994 1995
----------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of year...................................... $12.50 $12.47 $11.94
----------- -------- --------
INVESTMENT OPERATIONS:
Investment income-net................................................... .89 .84 .85
Net realized and unrealized (loss) on investments....................... (.01) (.54) (.05)
----------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS...................................... .88 .30 .80
----------- -------- --------
DISTRIBUTIONS:
Dividends from investment income-net.................................... (.89) (.83) (.85)
Dividends from net realized gain on investments......................... (.02) -- --
----------- -------- --------
TOTAL DISTRIBUTIONS................................................... (.91) (.83) (.85)
----------- -------- --------
Net asset value, end of year............................................ $12.47 $11.94 $11.89
=========== ======== ========
TOTAL INVESTMENT RETURN..................................................... 7.68%(2) 2.47% 7.05%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. -- .24% .61%
Ratio of net investment income to average net assets.................... 7.58%(2) 6.79% 7.26%
Decrease reflected in above expense ratios due to undertakings
by the Manager........................................................ 1.12%(2) .71% .34%
Portfolio Turnover Rate................................................. 54.59%(3) 74.90% 511.62%
Net Assets, end of year (000's Omitted)................................. $205,736 $277,028 $210,524
__________________________
(1) From August 18, 1992 (commencement of operations) to July 31, 1993.
(2) Annualized.
(3) Not Annualized.
See notes to financial statements.
</TABLE>
DREYFUS SHORT-TERM INCOME FUND, 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 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 FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., 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 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 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. 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, 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.
The Fund has an unused capital loss carryover of approximately $9,958,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to July 31, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through
DREYFUS SHORT-TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
July 31, 1995 which are treated, for Federal income tax purposes, as arising
in fiscal 1996. If not applied, the carryover expires in fiscal 2003.
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 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 July 13, 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 July 14, 1995
through September 30, 1995, or until such time as the net assets of the Fund
exceed $350 million, regardless of whether they remain at that level, to
reduce the management fee paid by, or reimburse such excess expenses of the
Fund, to the extent that the Fund's aggregate annual expenses (excluding
certain expenses as described above) exceed an annual rate of .80 of 1% of
the average daily value of the Fund's net assets. The reduction in management
fee, pursuant to the undertakings, amounted to $682,003 for the year ended
July 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
aggregate 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
DREYFUS SHORT-TERM INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 year ended July 31, 1995, $474,522 was chargeable to the Fund
pursuant to the Plan, of which $103,526 was waived by the Fund, and $43,686
was charged pursuant to the prior Service Plan.
(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 $625 per meeting.
The Chairman of the Board receives an additional 25% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of securities, other than
short-term securities, during the year ended July 31, 1995 amounted to
$1,104,174,462 and $1,172,464,010, respectively.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $1,584,922 consisting of $2,853,893 gross unrealized appreciation and
$1,268,971 gross unrealized depreciation.
At July 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.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS SHORT-TERM INCOME FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Short-Term Income Fund, Inc., including the statement of investments,
as of July 31, 1995, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
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 July 31, 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 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 Short-Term Income Fund, Inc. at July 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
Ernst & Young LLP (signature logo)
New York, New York
August 30, 1995
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. 083AR957
Short-Term Income
Fund, Inc.
Annual Report
July 31, 1995
