LETTER TO SHAREHOLDERS
Dear Shareholder:
In a six-month period marked by pervasive changes in the financial
markets, The Dreyfus Socially Responsible Growth Fund outperformed the major
stock market indexes.
For the semi-annual period ended June 30, 1994, the Dow Jones Industrial
Average showed a total return of -2.11%, while the total return for the
Standard and Poor's 500 Index was -3.38%.* For the same time period, your
Fund's total return was -.75%.** The Fund's performance does not reflect the
deduction of additional charges applicable to separate accounts of
participating insurance companies using the Fund as an underlying investment.
RISING INTEREST RATES
To be sure, we are not pleased that the first nine-month period of
operations for the Fund, which commenced operations on October 7, 1993, was a
time of turmoil in the stock and bond markets. As is well known, this was the
result of the Federal Reserve Board's policy of raising interest rates as a
preventive measure in order to head off inflation at a time when the American
economy was enjoying a period of expansion.
Since February 4, 1994 the Federal Reserve has raised the Federal Funds
rate four times, for a total increase of 125 basis points. So far inflation
appears to be adequately restrained, while there are many indicators that the
economy continues to grow.
Although the central banking authorities may be taking some bows for this
combination of economic trends, there is no doubt that the stock and bond
markets have paid the price.
In this atmosphere, we have been managing the Fund's assets in a cautious
manner, without great departure from the strategy that was outlined in our
previous report of December 31, 1993.
PORTFOLIO REVIEW
As you know, the Fund seeks long-term capital appreciation by investing
in companies which, in management's opinion, have attractive investment
prospects, and also qualify for inclusion in the Fund's portfolio on the
basis of socially responsible criteria, as screened by the Dreyfus research
staff.
One theme we emphasized during the most recent six-month period was
investment in companies that derive an important share of their profits
internationally. The stocks of Johnson & Johnson, Gillette, Microsoft and
Disney (Walt) fit this category.
The health care sector, in our view, has become more attractive as this
vitally important industry has taken steps to reduce costs to the consumer,
partly in anticipation of legislation from Congress. We nearly doubled the
weighting of health care stocks during the last six months, particularly
among companies that deliver health services to the consumer. Our holdings in
NovaCare, Charter Medical and Columbia/HCA Healthcare are in this category.
The Fund reduced positions in some technology stocks, which we thought
had reached price objectives. These included EMC, FTP Software, General
Motors Cl. E, Genetic Therapy, Informix, Intel and Jacobs Engineering Group.
Major positions have been retained in Microsoft, Compaq Computer and Oracle
Systems, where we believe prospects are better.
We also reduced the commitment to financial stocks, notably Banc One,
Bankers Life Holding, J.P. Morgan and Wachovia. The greater volatility of
interest rates was one reason for these sales.
We cut back somewhat in the area of consumer durables and producer
manufacturing, although we increased our holdings in consumer nondurables --
principally through the purchase of Gillette. We also strengthened our
foothold in the process industries by acquiring stock in Airgas.
At a time like the present, we believe it is prudent to keep a sensibly
sized reserve for future investment in stocks. Accordingly, as of June 30 the
Fund held a sizable cash cushion that can be quickly invested as market
opportunities arise.
While making these changes in the portfolio, we have taken steps to add
to the investment expertise available for advising the Fund's management. As
of June 30, the Fund's Board of Directors and its shareholders have approved
a new Sub-Investment Advisory Agreement which provides that Dreyfus will
engage NCM Capital Management Group, Inc. as the Fund's sub-investment
adviser. As of June 30, 1994 NCM Capital, located in Durham, N.C., had a
47-member staff, 76 institutional clients and over $2.2 billion in assets
under management, including a number of corporate and pension fund accounts.
We are carefully watching the investment scene on your behalf and will
not hesitate to change tactics as market conditions require.
Sincerely,
(signature logo)
Howard Stein
Chairman of the Board and
Chief Executive Officer
July 20, 1994
New York, N.Y.
* SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment
of income dividends and, where applicable, capital
gain distributions. Both the Dow Jones Industrial Average and the
Standard & Poor's 500 Composite Stock Price Index are widely accepted
unmanaged indexes of stock market performance.
** Total return represents the change during the period in a
hypothetical account with dividends reinvested.
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS-46.4% SHARES VALUE
---------- ----------
<S> <C> <C> <C> <C>
Consumer Durables-.7% Duracraft.......................(a) 300 $ 13,125
Lennar........................... 1,500 28,313
----------
41,438
----------
Consumer Non-Durables-3.3% Gillette.......................... 3,000 195,375
----------
Consumer Services-2.8% Disney (Walt)..................... 4,000 166,500
----------
Finance-3.2% AFLAC............................. 1,000 33,750
Bank of New York................. 400 11,550
BankAmerica...................... 400 18,300
Citicorp......................... 700 27,912
First Colony..................... 3,000 64,500
First Interstate Bancorp......... 200 15,400
Midlantic........................ 600 17,550
----------
188,962
----------
Health Care-13.1% Charter Medical.................(a) 7,500 169,687
Columbia/ HCA Healthcare......... 4,500 168,750
Health Care & Retirement...... (a) 600 14,850
HealthCare COMPARE.............(a) 1,300 23,075
Johnson & Johnson................ 4,700 201,513
Merck & Co. ..................... 700 20,825
NovaCare.......................(a) 11,000 176,000
----------
774,700
----------
Non-Energy Minerals-.8% IMCO Recycling..................(a) 3,400 47,600
----------
Process Industries-2.7% Airgas..........................(a) 6,000 158,250
----------
Producer Manufacturing-.8% Cincinnati Milacron............... 1,000 20,875
Ingersoll-Rand................... 800 28,100
----------
48,975
----------
Retail Trade-4.2% Dollar General.................... 875 21,875
Penney (J.C.).................... 3,000 162,750
Wal-Mart Stores.................. 2,500 60,625
----------
245,250
----------
Technology-11.1% Adaptec.........................(a) 1,500 26,250
Ameritech........................ 4,500 172,125
Compaq Computer................ (a) 1,800 58,050
Microsoft...................... (a) 3,500 180,250
Molex............................ 600 22,800
Motorola......................... 600 26,700
Oracle Systems.................(a) 1,000 37,500
Read-Rite......................(a) 10,000 128,750
----------
652,425
----------
Transportation-2.8% Illinois Central.................. 5,000 165,625
----------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
---------- ----------
Utilities-.9% AirTouch Communications.........(a) 500 $ 11,812
Southwestern Bell................ 900 39,150
----------
50,962
----------
TOTAL COMMON STOCKS
(cost $2,731,225).............. $2,736,062
==========
PRINCIPAL
SHORT-TERM INVESTMENTS-63.4% AMOUNT
----------
U.S. Government Agencies-35.9% Federal Farm Credit Bank
4.17%, 7/5/94................ $ 715,000 $ 714,669
Federal Home Loan Mortgage Corp.
4.15%, 7/1/94................ 700,000 700,000
Federal National Mortgage Association
4.15%, 7/8/94................ 700,000 699,435
----------
2,114,104
----------
U.S. Treasury Bills-27.5% 3.64%, 7/14/94.................... 512,000 511,327
3.56%, 7/21/94................... 103,000 102,796
4.13%, 8/25/94................... 111,000 110,300
4.10%, 9/1/94.................... 900,000 893,645
----------
1,618,068
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,732,172).............. $3,732,172
==========
TOTAL INVESTMENTS (cost $6,463,397)............................................... 109.8% $6,468,234
====== ==========
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (9.8%) $ (577,286)
====== ==========
NET ASSETS.................................................................. 100.0% $5,890,948
====== ==========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $6,463,397)-see statement....................................... $6,468,234
Cash.................................................................... 905,433
Receivable for investment securities sold............................... 475,070
Dividends receivable.................................................... 1,705
Prepaid expenses........................................................ 59,674
Due from The Dreyfus Corporation........................................ 23,402
----------
7,933,518
LIABILITIES:
Payable for investment securities purchased............................. $2,006,479
Accrued expenses........................................................ 36,091 2,042,570
---------- ----------
NET ASSETS ................................................................ $5,890,948
==========
REPRESENTED BY:
Paid-in capital......................................................... $5,939,655
Accumulated undistributed investment income-net......................... 39,866
Accumulated net realized (loss) on investments.......................... (93,410)
Accumulated net unrealized appreciation on investments-Note 3........... 4,837
----------
NET ASSETS at value applicable to 443,545 outstanding shares of
Common Stock, equivalent to $13.28 per share
(150 million shares of $.001 par value authorized)...................... $5,890,948
==========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $ 37,864
Cash dividends (net of $13 foreign taxes withheld at source).......... 6,531
---------
TOTAL INCOME.................................................... $ 44,395
EXPENSES:
Investment advisory fee-Note 2(a)..................................... 10,877
Sub-investment advisory fee-Note 2(a)................................. 1,673
Legal fees............................................................ 38,570
Organization expenses................................................. 8,259
Auditing fees......................................................... 7,519
Directors' fees and expenses-Note 2(c)................................ 5,957
Shareholder servicing costs-Note 2(b)................................. 4,585
Prospectus and shareholders' reports.................................. 4,098
Registration fees..................................................... 1,585
Custodian fees........................................................ 1,333
Miscellaneous......................................................... 826
---------
85,282
Less-expense reimbursement from Dreyfus and Tiffany due to
undertakings-Note 2(a)............................................ 81,099
---------
TOTAL EXPENSES.................................................. 4,183
----------
INVESTMENT INCOME-NET........................................... 40,212
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $(93,427)
Net unrealized (depreciation) on investments............................ (24,280)
---------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (117,707)
----------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (77,495)
==========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1994
1993* (UNAUDITED)
------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 3,558 $ 40,212
Net realized gain (loss) on investments.............................. 17 (93,427)
Net unrealized appreciation (depreciation) on investments for the period 29,117 (24,280)
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... 32,692 (77,495)
---------- ----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................ (3,904) --
---------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................ 1,471,438 5,445,090
Dividends reinvested................................................. 3,904 --
Cost of shares redeemed.............................................. (232,432) (848,345)
---------- ----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............. 1,242,910 4,596,745
---------- ----------
TOTAL INCREASE IN NET ASSETS................................... 1,271,698 4,519,250
NET ASSETS:
Beginning of period.................................................. 100,000 1,371,698
---------- ----------
End of period (including distributions in excess of investment income-net
of ($346) in 1993 and undistributed investment income-net of $39,866 in
1994).................................................................... $1,371,698 $5,890,948
========== ==========
SHARES SHARES
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 112,080 403,920
Shares issued for dividends reinvested............................... 292 ---
Shares redeemed...................................................... (17,869) (62,878)
---------- ----------
NET INCREASE IN SHARES OUTSTANDING................................. 94,503 341,042
========== ==========
* From October 7, 1993 (commencement of operations) to December 31, 1993.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH 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.
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1994
PER SHARE DATA: 1993(1) (UNAUDITED)
------------------------------
<S> <C> <C>
Net asset value, beginning of period................................. $12.50 $13.38
------ ------
INVESTMENT OPERATIONS:
Investment income-net................................................ .04 .09
Net realized and unrealized gain (loss) on investments............... .88 (.19)
------ ------
TOTAL FROM INVESTMENT OPERATIONS................................... .92 (.10)
------ ------
DISTRIBUTIONS;
Dividends from investment income-net................................. (.04) --
------ ------
Net asset value, end of period....................................... $13.38 $13.28
------ ------
------ ------
TOTAL INVESTMENT RETURN.................................................. 7.35%(2) (.75%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................. .06%(2) .12%(2)
Ratio of net investment income to average net assets................. .64%(2) 1.19%(2)
Decrease reflected in above expense ratios due to
undertakings by Dreyfus and Tiffany................................ 6.19%(2) 2.40%(2)
Portfolio Turnover Rate.............................................. -- 38.27%(2)
Net Assets, end of period (000's Omitted)............................ $1,372 $5,891
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH 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 diversified open-end management investment company. The Fund is intended
to be a funding vehicle for variable annuity contracts and variable life
insurance policies to be offered by the separate accounts of life insurance
companies. The Dreyfus Corporation ("Dreyfus") serves as the Fund's
investment adviser. Tiffany Capital Advisors, Inc. ("Tiffany") serves as the
Fund's sub-investment adviser. Dreyfus Service Corporation ("Distributor"), a
wholly-owned subsidiary of Dreyfus, acts as the exclusive distributor of the
Fund's shares, which are sold without a sales charge.
Subject to shareholder approval, a new Sub-Investment Advisory Agreement
between Dreyfus and NCM Capital Management Group, Inc. will replace the
existing Sub-Investment Advisory Agreement between the Fund and Tiffany
Capital Advisors, Inc.
(A) PORTFOLIO VALUATION: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available. Short-term investments are carried at amortized cost, which
approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. 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.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and 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. This may result in distributions
that are in excess of investment income-net on a fiscal year basis. 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 taxes.
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT
IONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an Investment
Advisory Agreement with Dreyfus and a Sub-Investment Advisory Agreement with
Tiffany (together "Agreements") are payable monthly and computed on the
average daily value of the Fund's net assets at the following annual rates:
<TABLE>
TOTAL NET ASSETS DREYFUS TIFFANY
------------------- ------------- -------------
<S> <C> <C>
The first $200 million............................................... .65 of 1% .10 of 1%
$200 up to $300 million.............................................. .55 of 1% .20 of 1%
In excess of $300 million............................................ .375 of 1% .375 of 1%
</TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Agreements further provide that if in any full year the aggregate
expenses of the Fund, excluding taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the fees to be paid to
Dreyfus and Tiffany, or Dreyfus and Tiffany will bear, such excess, up to the
amount of their respective fees, on a pro rata basis in proportion to the
relative fees otherwise payable to each pursuant to the Agreements. However,
Dreyfus and Tiffany have undertaken from January 1, 1994 through July 31,
1994 or until such time as the net assets of the Fund exceed $25 million,
regardless of whether they remain at that level, to waive receipt of the
investment advisory and sub-investment advisory fees payable to them by the
Fund. Pursuant to the undertakings, Dreyfus and Tiffany waived the investment
advisory and sub-investment advisory fees for the six months ended June 30,
1994, which amounted to $10,877 and $1,673, respectively. In addition,
Dreyfus has undertaken through July 31, 1994 to assume those expenses
(excluding the investment advisory fee and certain expenses as described
above) incurred by the Fund, to the extent that such expenses exceed an annual
rate of .25 of 1% of the Fund's average daily net assets. The expense
reimbursement, pursuant to the undertaking, amounted to $68,549 for the six
months ended June 30, 1994.
The undertakings may be modified by Dreyfus from time to time, provided
that the resulting expense reimbursement would not be less than the amount
required pursuant to the Agreements.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor 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
with respect to servicing and/or maintaining shareholder accounts. During the
six months ended June 30, 1994, no amounts were charged to the Fund pursuant
to the Shareholder Services Plan.
(C) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Investment Adviser and/or the Distributor. Each
director who is not an "affiliated person" receives an annual fee of $2,500.
(D) On December 5, 1993, Dreyfus entered into an Agreement and Plan of
Merger (the "Merger Agreement") providing for the merger of Dreyfus with a
subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, Dreyfus will seek various approvals from the Fund's shareholders
before completion of the merger. Proxy materials, approved by the Fund's
Board, recently have been mailed to Fund shareholders.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the six months ended June 30, 1994,
amounted to $2,571,112 and $541,385, respectively.
At June 30, 1994, accumulated net unrealized appreciation on investments
was $4,837, consisting of $58,382 gross unrealized appreciation and $53,545
gross unrealized depreciation.
At June 30, 1994, 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).
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
The Dreyfus Socially Responsible Growth Fund, Inc., including the statement
of investments, as of June 30, 1994, and the related statements of operations
and changes in net assets and financial highlights for the six month period
ended June 30, 1994. 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 and financial
highlights for the period from October 7, 1993 (commencement of operations)
to December 31, 1993 and in our report dated January 28, 1994, we expressed
an unqualified opinion on such statement of changes in net assets and
financial highlights.
New York, New York
August 2, 1994
Socially Responsible
Growth Fund, Inc.
Semi-Annual
Report
June 30, 1994
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
Tiffany Capital Advisors, Inc.
2300 Computer Avenue, Suite D-21
Willow Grove, PA 19090
CUSTODIAN
The Bank of New York
110 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. 111SA946
