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PROSPECTUS MAY 1, 1995
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
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THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (THE "FUND") IS
AN OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL
FUND, THAT IS INTENDED TO BE A FUNDING VEHICLE FOR VARIABLE ANNUITY CONTRACTS
AND VARIABLE LIFE INSURANCE POLICIES TO BE OFFERED BY THE SEPARATE ACCOUNTS
OF VARIOUS LIFE INSURANCE COMPANIES (THE "PARTICIPATING INSURANCE
COMPANIES"). THE PRIMARY GOAL OF THE FUND IS TO PROVIDE CAPITAL GROWTH.
CURRENT INCOME IS A SECONDARY GOAL. THE FUND INVESTS PRINCIPALLY IN COMMON
STOCKS, OR SECURITIES CONVERTIBLE INTO COMMON STOCK, OF COMPANIES WHICH, IN
THE OPINION OF THE FUND'S MANAGEMENT, NOT ONLY MEET TRADITIONAL INVESTMENT
STANDARDS, BUT ALSO SHOW EVIDENCE THAT THEY CONDUCT THEIR BUSINESS IN A
MANNER THAT CONTRIBUTES TO THE ENHANCEMENT OF THE QUALITY OF LIFE IN AMERICA.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S INVESTMENT
ADVISER. NCM CAPITAL MANAGEMENT GROUP, INC. ("NCM") SERVES AS THE FUND'S
SUB-INVESTMENT ADVISER AND PROVIDES DAY-TO-DAY MANAGEMENT OF THE FUND'S
PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT AN INVESTOR SHOULD KNOW BEFORE INVESTING IN THE FUND THROUGH CERTAIN
VARIABLE ANNUITY CONTRACTS AND VARIABLE LIFE INSURANCE POLICIES OFFERED BY
PARTICIPATING INSURANCE COMPANIES. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED MAY 1, 1995, WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER
DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE
OF INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY,
WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL (516)338-3300.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE PAGE
<S> <C> <S> <C>
CONDENSED FINANCIAL INFORMATION....... 2 HOW TO REDEEM FUND SHARES............... 8
DESCRIPTION OF THE FUND............... 2 SHAREHOLDER SERVICES PLAN............... 8
SPECIAL CONSIDERATIONS................ 3 DIVIDENDS, DISTRIBUTIONS AND TAXES...... 8
MANAGEMENT OF THE FUND................ 5 PERFORMANCE INFORMATION................. 9
HOW TO BUY FUND SHARES................ 7 GENERAL INFORMATION..................... 9
</TABLE>
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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FUND SHARES ARE AVAILABLE EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR LIFE
INSURANCE COMPANIES WRITING ALL TYPES OF VARIABLE LIFE INSURANCE POLICIES AND
VARIABLE ANNUITY CONTRACTS. THIS PROSPECTUS SHOULD BE ACCOMPANIED BY THE
PROSPECTUS FOR SUCH POLICIES AND CONTRACTS.
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CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Fund's Statement of Additional Information. Further financial information
and related notes are included in the Statement of Additional Information,
available upon request.
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 data has
been derived from the Fund's financial statements. The Fund's total
investment return shown below does not include expenses charged a separate
account or related insurance policy by a Participating Insurance Company,
inclusion of which would reduce the Fund's total investment return for each
period indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993(1) 1994
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<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year..................................................... $12.50 $13.38
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INVESTMENT OPERATIONS:
Investment income_net ................................................................ .04 .35
Net realized and unrealized gain (loss) on investments................................. .88 (.15)
------- ------
TOTAL FROM INVESTMENT OPERATIONS....................................................... .92 .20
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DISTRIBUTIONS;
Dividends from investment income-net................................................... (.04) (.35)
------- ------
Net asset value, end of year........................................................... $13.38 $13.23
========= =======
TOTAL INVESTMENT RETURN.................................................................. 7.35%(2) 1.49%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................................ .06%(2) .25%
Ratio of net investment income to average net assets................................... .64%(2) 4.58%
Decrease reflected in above expense ratios due to
undertakings by Dreyfus and Tiffany.................................................... 6.19%(2) 2.60%
Portfolio Turnover Rate................................................................ -_ 373.68%
Net Assets, end of year (000's omitted)................................................ $1,372 $10,406
</TABLE>
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(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
Further information about the Fund's performance is contained in
the Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
GENERAL _ The Fund is intended to be a funding vehicle for variable annuity
contracts ("VA contracts") and variable life insurance policies ("VLI
policies") to be offered by the separate accounts of Participating Insurance
Companies. Individual VA contract holders and VLI policy holders are not the
"shareholders" of the Fund. Rather, the Participating Insurance Companies and
their separate accounts are the shareholders (the "shareholders"), although
such Participating Insurance Companies will pass through voting rights to
their VA contract holders and VLI policy holders. The VA contracts and the
VLI policies are described in the separate prospectuses issued by the
Participating Insurance Companies over which the Fund assumes no
responsibility. The Fund currently does not foresee any disadvantages to the
holders of VA contracts and VLI policies arising from the fact that the
interests of the holders of such contracts and policies may differ.
Nevertheless, for so long as the Fund is a funding vehicle for VA contracts
and VLI policies, the Fund's Board of Directors will monitor events in order
to identify any material conflicts which may arise and to determine what
action, if any, should be taken in response thereto. Should any conflict
between VA contract holders and VLI policy holders arise, a separate account
may be required to withdraw from participation in the Fund. Such a withdrawal
could have a disruptive effect on orderly portfolio management to the
potential detriment of VA contract holders and VLI policy holders.
Page 2
INVESTMENT OBJECTIVES _ The Fund's primary goal is to provide capital growth
through equity investment in companies that, in the opinion of the Fund's
management, not only meet traditional investment standards but which also
show evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America. Current income is
secondary to the primary goal. There can be no assurance that the Fund's
investment objectives will be achieved.
SPECIAL CONSIDERATIONS
TYPES OF COMPANIES SOUGHT FOR INVESTMENT _ To assess whether a company
contributes to the enhancement of the quality of life in America, the Fund
considers a company's record in the areas of (1) protection and improvement
of the environment and the proper use of our natural resources, (2) occupation
al health and safety, (3) consumer protection and product purity, and (4)
equal employment opportunity. There are few generally accepted measures of
achievement in these areas. The development of suitable measurement
techniques, therefore, will be largely within the discretion and judgment of
the management of the Fund. Management does not intend at present to evaluate
in depth a company's activities not directly connected with the conduct of
its business (such as participation in community improvement projects) or the
secondary implications of corporate activities (for example, in examining
banks, the business activities of their borrowers will not be evaluated).
The Fund's special considerations tend to limit the availability of
investment opportunities more than is customary with other investment
companies, including those managed by Dreyfus. Management believes, however,
that there are sufficient investment opportunities among companies which meet
the Fund's special considerations to permit full investment, if management
believes it desirable, in securities which meet the Fund's investment
objective of capital growth through equity investment.
The Fund's objectives and special considerations above cannot be
changed without approval by the holders of a majority, as defined in the
Investment Company Act of 1940 (the "Act"), of the Fund's outstanding voting
shares.
THE INVESTMENT SELECTION PROCESS _ Potential investment portfolio selections
(based on traditional investment considerations, including an opinion of the
fundamental value of the security and other market factors) are designated to
the Dreyfus research staff. The staff begins a process of searching publicly
available information about the company to determine its record in the areas
of special concern to the Fund. Researchers use commercially available
computer data bases and reviews and evaluations published or made available
by "watchdog" groups whose interests focus on one or more of the special
areas, such as the environment, equal employment opportunity, product safety
or occupational safety and health, as applicable. Additional data may be
obtained, where practical, from local, state and federal agencies which
maintain surveillance in certain areas of interest to the Fund and which
provide this data to the public.
If the initial evaluation reveals no negative pattern in the areas
of special concern to the Fund, a company's securities are eligible for
purchase. The research staff supplements this initial screening by asking the
company to complete a questionnaire designed by the Fund to aid in the
evaluation of the company's conduct in the areas of special concern. The
examination of a company may also include personal interviews with company
officials, inspection of facilities and other techniques that may be applicabl
e to specific companies or industries.
If it is determined at any stage that purchase or retention of the
portfolio securities is not consistent with the Fund's goal of investing in
companies whose conduct contributes to the enhancement of the quality of life
in America, the security will not be purchased or if already purchased will
be sold as expeditiously as possible, consistent with the best interests of
the Fund.
The Board will review new portfolio acquisitions in light of the
Fund's special concerns at their next regular meeting. While the Board of
Directors will disqualify a company evidencing a pattern of conduct that is
inconsistent with the Fund's special standards, the Board need not disqualify
a company on the basis of incidents that, in the Board's judgment, do not
reflect the company's policies and overall current level of performance in
the areas of special concern to the Fund. The performance of companies in the
areas of special concern are reviewed regularly to determine their continued
eligibility.
Page 3
MANAGEMENT POLICIES _ Depending on market conditions, the Fund attempts to
be fully invested in common stock, or securities convertible into common
stock, which meet both traditional investment standards and the Fund's
investment criteria described under "Types of Companies Sought for
Investment."
As a fundamental policy, the Fund is permitted to borrow to the
extent permitted under the Act. However, the Fund currently intends to borrow
money only for temporary or emergency (not leveraging) purposes, in an amount
up to 15% of the value of the Fund's total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Fund's total assets, the Fund will not make any
additional investments.
The Fund may invest up to 15% of the value of its net assets in
securities which are illiquid securities, provided such investments are
consistent with the Fund's investment objective. Illiquid securities are
securities which are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days after notice, and
certain options traded in the over-the-counter market and securities used to
cover such options. Investment in illiquid securities subjects the Fund to
the risk that it will not be able to sell such securities when it may be
opportune to do so.
During periods in which management believes adverse trends are
occurring in the financial markets or the economy, the Fund may adopt a
temporary defensive posture to preserve shareholders' capital by investing in
U.S. Government securities, and also in corporate bonds, high grade
commercial paper, repurchase agreements, time deposits, bank certificates of
deposit, bankers' acceptances and other short-term bank obligations issued in
this country as well as those issued in dollar denominations by the foreign
branches of U.S. banks, and cash or cash equivalents, without limit as to
amount, as long as such investments are made in securities of eligible
companies and domestic banks. When the Fund has adopted a temporary defensive
posture, the entire portfolio can be so invested. During such periods, the
Fund may not achieve its investment objectives.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. The Fund's custodian will have
custody of, and will hold in a segregated account, securities acquired by the
Fund under a repurchase agreement. Repurchase agreements are considered by
the staff of the Securities and Exchange Commission to be loans by the Fund.
In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of one billion dollars or primary
government securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of the type in which the Fund may invest,
and the Fund will require that additional securities be deposited with its
custodian if the value of the securities purchased should decrease below
resale price. Dreyfus will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Fund in connection with the sale of the
securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the securities
by the Fund may be delayed or limited. The Fund will consider on an ongoing
basis the creditworthiness of the institutions with which it enters into
repurchase agreements.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
To earn additional income on its portfolio, the Fund may write
(sell) covered call option contracts on securities it owns to the extent of
20% of the value of its net assets at the time such option contracts are
writ-
Page 4
ten. A call option gives the purchaser of the option the right to buy,
and obligates the writer to sell, the underlying security at the exercise
price at any time during the option period. A covered call option sold by the
Fund, which is a call option on a security owned by the Fund, exposes the
Fund during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or to possible
continued holding of a security which might otherwise have been sold to
protect against depreciation in the market price of the security.
A more detailed description of the securities in which the Fund may
invest can be found in the Statement of Additional Information.
The Fund may invest in companies with substantial overseas
activities, but, at present, management will not examine corporate activities
carried on outside the United States.
CERTAIN FUNDAMENTAL POLICIES _ The Fund may (i) borrow money to the extent
permitted under the Act; (ii) invest up to 5% of the value of its total net
assets in the securities of any one issuer (except securities of the U.S.
Government or any instrumentality thereof); (iii) invest in companies having
less than three years continuous operating history (including that of
predecessors) but only in an amount up to 5% of the value of its net assets;
and (iv) invest up to 25% of the value of its total assets in any single
industry. This paragraph describes fundamental policies of the Fund which
cannot be changed without approval by the holders of a majority (as defined
in the Act) of the Fund's outstanding voting shares. See "Investment
Objectives and Management Policies_Investment Restrictions" in the Fund's
Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES _ The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 15% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
days after notice and in other illiquid securities. See "Investment
Objectives and Management Policies _ Investment Restrictions" in the Fund's
Statement of Additional Information.
INVESTMENT CONSIDERATIONS _ The Fund will not seek to realize profits by
anticipating short-term market movements. When market conditions permit, the
Fund generally intends to retain securities for at least the applicable
statutory long-term capital gain period. The annual portfolio turnover rate
indicates the rate of change in the Fund's portfolio; for instance, a rate of
100% would result if all the securities in the portfolio at the beginning of
an annual period had been replaced by the end of the period. While the rate
of portfolio turnover will not be a limiting factor when management deems
changes appropriate, it is anticipated that, in view of the Fund's investment
objectives, its annual turnover rate generally should not exceed 75%. When
extraordinary market conditions prevail, a higher turnover rate and increased
brokerage expenses may be expected.
Investment decisions for the Fund are made independently from those
of other investment companies advised by Dreyfus. However, if such other
investment companies are prepared to invest in, or desire to dispose of,
securities of the type which the Fund invests in at the same time as the
Fund, available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Fund or the price received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER _ Dreyfus, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser.
Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As of January
31, 1995, Dreyfus managed or administered approximately $70 billion in assets
for more than 1.9 million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
overall authority of the Fund's Directors in accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a com-
Page 5
prehensive range of financial products and services in domestic and selected
international markets. Mellon is among the twenty-five largest bank holding
companies in the United States based on total assets. Mellon's principal
wholly-owned subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO Credit
Corporation and a number of companies known as Mellon Financial Services
Corporations. Through its subsidiaries, including Dreyfus, Mellon managed more
than $193 billion in assets as of December 31, 1994, including approximately
$70 billion in mutual fund assets. As of December 31, 1994, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets including
approximately $74 billion in mutual fund assets.
Under the Management Agreement, the Fund has agreed to pay Dreyfus an
annual fee, payable monthly, at the annual rate of .75 of 1% of the value of
the Fund's average daily net assets.
The fee paid to Dreyfus is higher than that paid by most other
investment companies.
For the fiscal year ended December 31, 1994, no advisory fee was paid
by the Fund pursuant to an undertaking by Dreyfus.
SUB-INVESTMENT ADVISER _ NCM, located at 103 West Main Street, Durham, North
Carolina 27705-3638, a registered investment adviser, serves as the Fund's
Sub-Investment Adviser. NCM was incorporated in 1986 and is one of the
nation's largest minority-owned investment management firms. Prior to August
2, 1994, NCM had not advised a registered investment company. Currently, NCM
serves as the sub-investment adviser for one other registered investment
company. As of December 31, 1994, NCM managed or administered approximately
$2.7 billion in assets.
NCM, subject to the supervision and approval of Dreyfus, provides
investment advisory assistance and the day-to-day management of the Fund's
portfolio, as well as research and statistical information under a
Sub-Investment Advisory Agreement with Dreyfus, subject to the overall
authority of the Fund's Directors in accordance with Maryland law.
Under the Sub-Investment Advisory Agreement, Dreyfus has agreed to
pay NCM an annual fee, payable monthly, as set forth below:
<TABLE>
<CAPTION>
<S> <C>
Annual Fee as a Percentage of
TOTAL ASSETS AVERAGE DAILY NET ASSETS
0 up to $500 million.......................... .10 of 1%
In excess of $500 million..................... .20 of 1%
</TABLE>
The Fund's portfolio managers primarily responsible for management
of the Fund's portfolio are Diane M. Coffey, with respect to the Fund's areas
of special concern, and Maceo K. Sloan, with respect to selection of portfolio
securities. Ms. Coffey has held that position since March 1990 and has been
employed by Dreyfus since January 1990. From January 1983 to January 1990, she
served as Chief of Staff for New York City Mayor Edward I. Koch. Mr. Sloan has
held his position with the Fund since August 1994 and has been employed by NCM
since 1986. The Fund's other portfolio managers are identified under"Management
of the Fund" in the Fund's Statement of Additional Information. Dreyfus also
provides research services for the Fund as well as for other funds advised by
Dreyfus through a professional staff of portfolio managers and security
analysts.
For the period January 1, 1994 through August 1, 1994, $2,200 was
payable by the Fund to Tiffany Capital Advisors, Inc. ("Tiffany"), the Fund's
predecessor sub-investment adviser. However, no sub-investment advisory fee
was paid by the Fund pursuant to an undertaking by Tiffany.
EXPENSES _ From time to time, Dreyfus may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the effect
of lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case may be.
The Fund will not pay Dreyfus at a later time for any amounts it may waive
nor will the Fund reimburse Dreyfus for any amounts it may assume.
Dreyfus may pay the Fund's distributor for shareholder services
from Dreyfus' own assets, including past
Page 6
profits, but not including the
management fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay securities dealers or others in respect of these
services.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by Dreyfus. The expenses
borne by the Fund include: taxes, interest, brokerage fees and commissions,
if any, fees of Directors who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of Dreyfus or NCM,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining corporate existence, costs
of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), cost of
shareholders' reports and corporate meetings, cost of preparing, printing and
distributing prospectuses and statements of additional information, and any
extraordinary expenses.
Dreyfus has agreed that if in any fiscal year, the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitation of any state having jurisdiction over the Fund, the Fund may
deduct from the fee to be paid to Dreyfus, or Dreyfus will bear, the excess
expense. For each fiscal year of the Fund, Dreyfus and NCM will pay or bear
such excess on a pro rata basis in the proportion that the sub-advisory fee
payable to NCM bears to the fee payable to Dreyfus pursuant to the Management
Agreement. Such deduction or payment, if any, will be estimated, reconciled
and effected or paid, as the case may be, on a monthly basis and will be
limited to the amount of fees otherwise payable to Dreyfus under the
Management Agreement.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor 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.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT _ The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Separate accounts of the Participating Insurance Companies place
orders based on, among other things, the amount of premium payments to be
invested pursuant to VA contracts and VLI policies. Individuals may not place
orders directly with the Fund. See the prospectus of the separate account of
the Participating Insurance Company for more information on the purchase of
Fund shares. The Fund does not issue share certificates.
Purchase orders from separate accounts which are received by the
Participating Insurance Company by 4:00 p.m. on a given business day will be
effected at the net asset value determined on such business day if the orders
are received by the Fund in proper form and in accordance with applicable
procedures by 4:00 p.m., New York time, on the next business day and Federal
Funds (monies of member banks within the Federal Reserve System which are
held on deposit at a Federal Reserve Bank) in the net amount of such orders
are received by the Fund on such next business day. It is each Participating
Insurance Company's responsibility to properly transmit purchase orders and
Federal Funds in accordance with applicable requirements.
Fund shares are sold on a continuous basis. Net asset value per
share is determined as of the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), on each day that the New
York Stock Exchange is open for business. For purposes of determining net
asset value per share, options will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net
Page 7
asset value per share is computed by dividing the Fund's net assets (i.e.,
the value of its assets less liabilities) by the total number of shares
outstanding. The Fund's investments are valued based on market value or, where
market quotations are not readily available, based on fair value as determined
in good faith by the Board of Directors. For further information regarding the
method employed in valuing Fund investments, see "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
HOW TO REDEEM FUND SHARES
Fund shares may be redeemed at any time by the separate accounts of
the Participating Insurance Companies. Individuals may not place redemption
orders directly with the Fund. Redemption requests from separate accounts
which are received by the Participating Insurance Company by 4:00 p.m. on a
given business day will be effected at the net asset value determined on such
business day if the requests are received by the Fund in proper form and in
accordance with applicable procedures by 4:00 p.m., New York time, on the
next business day. It is each Participating Insurance Company's
responsibility to properly transmit redemption requests in accordance with
applicable requirements. The value of the shares redeemed may be more or less
than their original cost, depending on the Fund's then-current net asset
value. No charges are imposed by the Fund when shares are redeemed.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request
in proper form, except as provided by the rules of the Securities and
Exchange Commission.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, an amount not to exceed an annual rate of .25 of 1% of the value of
the average daily net assets of the Fund's shares for certain allocated
expenses with respect to servicing and/or maintaining shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will pay dividends from net investment income and will
make distributions from net realized securities gains, if any, once a year,
but may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
Investment Company Act of 1940. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. Dividends are automatically reinvested in
additional Fund shares at net asset value unless payment in cash is elected.
All expenses are accrued daily and deducted before declaration of dividends
to investors.
Notice as to the tax status of dividends and distributions will be
mailed to shareholders annually. Dividends from net investment income,
together with distributions of net realized short-term securities gains and
gains from certain market discount bonds, generally are taxable as ordinary
income whether received in cash or reinvested in additional shares.
Distributions from net realized long-term securities gains of the Fund
generally are taxable as long-term capital gains whether received in cash or
reinvested in additional shares. Since the Fund's shareholders are the
Participating Insurance Companies and their separate accounts, no discussion
is included herein as to the Federal income tax consequences to VA contract
holders and VLI policy holders. For information concerning the Federal income
tax consequences to such holders, see the prospectus for such contract or
policy.
Section 817(h) of the Code requires that the investments of a
segregated asset account of an insurance company be "adequately diversified"
as provided therein or in accordance with U.S. Treasury Regulations in order
for the account to serve as the basis for VA contracts or VLI policies. The
Fund intends to comply with applicable requirements so that the Fund's
investments are "adequately diversified" for this purpose. Section 817(h) and
the U.S. Treasury Regulations issued thereunder provide the manner in which a
segregated asset
Page 8
account will treat investments in a regulated investment company for purposes
of the diversification requirements. If a Fund satisfies certain conditions,
a segregated asset account owning shares of the Fund will be treated as owning
multiple investments consisting of the account's proportionate share of each
of the assets of the Fund. The Fund intends to satisfy these conditions so
that the shares of the Fund owned by a segregated asset account of a
Participating Insurance Company will be treated as multiple investments.
Management of the Fund believes that the Fund qualified for the
fiscal year ended December 31, 1994 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of the Participating Insurance Companies. The Fund may
be subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of investment income and capital gains. If,
however, the Fund does not qualify as a "regulated investment company" it
will be subject to the general rules governing the Federal income taxation of
corporations under the Code.
Participating Insurance Companies should consult their tax advisers
regarding specific questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, the performance of the Fund will be
calculated on an average annual total return or total return basis.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods, or for
shorter periods depending upon the length of time during which the Fund has
operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information of the Fund should not be compared with other funds
that offer their shares directly to the public since the figures provided do
not reflect charges against Participating Insurance Companies. The effective
yield and total return for the Fund should be distinguished from the rate of
return of a corresponding subaccount or investment division of a separate
account of a Participating Insurance Company, which rate will reflect the
deduction of additional charges, including mortality and expense risk
charges, and will therefore be lower. VA contract holders and VLI policy
holders should consult the prospectus for such contract or policy.
Calculations of the Fund's performance information may reflect
absorbed expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Dow Jones Industrial Average, Standard & Poor's
500 Composite Stock Price Index, The VARDSsm Report, IBC/Donoghue's Money
Fund Report, FINANCIAL PLANNING MAGAZINE, MONEY MAGAZINE, Morningstar, Inc.,
Bank Rate Monitor, N. Palm Beach, Fla. 33408 or other industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on July 20, 1992 and
commenced operations on October 7, 1993. In August 1994, at a meeting of
shareholders of the Fund, shareholders approved, among other
Page 9
things, changes in the Fund's fundamental policies and investment
restrictions, a new Management Agreement between the Fund and Dreyfus and a
new Sub-Investment Advisory Agreement between Dreyfus and NCM.
The Fund is authorized to issue 150 million shares of Common Stock,
par value $.001 per share. Each share has one vote, has equal voting,
redemption, dividends and liquidation rights, and, when issued in accordance
with the terms of this offering, is fully-paid and non-assessable. Shares are
freely transferable and are redeemable at net asset value, at the option of
the shareholder.
Unless otherwise required by the Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require
the Fund to hold a special meeting of shareholders for the purpose of
removing a Director from office and the holders of at least 25% of such
shares may require the Fund to hold a special meeting of shareholders for any
other purpose. Fund shareholders may remove a Director by the affirmative
vote of a majority of the Fund's outstanding voting shares. In addition, the
Board of Directors will call a meeting of shareholders for the purpose of
electing Directors if, at any time, less than a majority of the Directors
holding office at the time were elected by shareholders.
The Transfer Agent maintains a record of each shareholder's
ownership and will send confirmations and statements of account to each
shareholder.
Owners of policies and contracts issued by Participating Insurance
Companies for which shares of the Fund are an investment vehicle will receive
from the Participating Insurance Companies unaudited semi-annual financial
statements and audited year-end financial statements certified by the Fund's
independent auditors. Each report will show the investments owned by the Fund
and the market values thereof as determined by the Board of Directors and
will provide other information about the Fund and its operations.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling
(516)338-3300.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 10
DREYFUS
The Dreyfus
Socially Responsible
Growth Fund, Inc.
Prospectus
Copy Rights 1995 Dreyfus Service Corporation
111p3050195
__________________________________________________________________________
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
(STATEMENT OF ADDITIONAL INFORMATION)
PART B
MAY 1, 1995
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of The Dreyfus Socially Responsible Growth Fund, Inc. (the "Fund"), dated
May 1, 1995, as it may be revised from time to time. To obtain a copy of
the Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York, 11556-0144 or call the following number:
(516) 388-3300.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
NCM Capital Management Group, Inc. ("NCM") serves as the Fund's sub-
investment adviser. NCM provides day-to-day management of the Fund's
portfolio, subject to the supervision of the Manager.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies. . . . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . B-6
Investment Advisory Agreements . . . . . . . . . . . . . . . . . . . . . . B-9
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . B-11
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . B-12
Shareholder Services Plan . . . . . . . . . . . . . . . . . . . . . . . . B-13
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . B-13
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . . B-16
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . . . B-16
Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors. . . . . . . . . . . . . . . . . B-17
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . B-28
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
Portfolio Securities. During a period when it becomes desirable to
move the Fund toward a defensive position because of adverse trends in the
financial markets or the economy, the Fund may also invest in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. These include a variety of U.S. Treasury Securities,
which differ in their interest rates, maturities and times of issuance:
Treasury Bills have initial maturities of one year or less; Treasury Notes
have initial maturities of one to ten years; and Treasury Bonds generally
have initial maturities of greater then ten years. Some obligations
issued or guaranteed by U.S. Government agencies and instrumentalities,
such as Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the U.S.
Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others, such as
those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the instrumentality. These securities bear fixed, floating or variable
rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government-
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so since it is not so obligated by law. The Fund will
invest in such securities only when the Fund is satisfied that the credit
risk with respect to the issuer is minimal.
The Board of Directors of the Fund may, to a limited extent,
authorize the purchase of securities of foreign companies which have not
been declared eligible for investment ("ineligible securities") in order
to facilitate the purchase of securities of other foreign companies which
are contributing or will contribute to the enhancement of the quality of
life in America and which have been declared eligible for investment
("eligible securities"). Certain countries have limited, either
permanently or temporarily, the ability of foreigners to purchase shares
of their domestic companies, shares which are already owned outside the
country or shares which may be obtained through the sale of shares of
other companies located in the same country which are owned outside that
country. Accordingly, the Fund may purchase ineligible securities so that
these securities may be sold or redeemed in the country of origin, and the
proceeds thus received used for the purchase of eligible securities.
Otherwise ineligible securities purchased for this limited purpose
would be held in the Fund's portfolio for a maximum of 60 days in order to
enable the Fund to have sufficient time to provide for the transportation
of the securities and their sale or redemption. Most transactions of this
type, however, are expected to be completed in a much shorter period.
Furthermore, such investments are limited, as a fundamental policy, in the
aggregate, to a maximum of 2% of the net assets of the Fund at the time of
investment. Engaging in these transactions will result in additional
expense to the Fund in the form of brokerage commissions incurred in the
purchase and sale of the ineligible security. Finally, the Board of
Directors would authorize investments in ineligible securities only for
the purpose of facilitating the purchase of securities of a specific
eligible company.
Writing and Purchasing Options. To earn additional income on its
portfolio, the Fund, to a limited extent, may write covered call options
on securities owned by the Fund ("covered options" or "options") and
purchase call options in order to close option transactions, as described
below.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise
price at any time during the option period, regardless of the market price
of the security. The premium paid to the writer is the consideration for
undertaking the obligations under the option contract. When a covered
option is written by the Fund, the Fund will make arrangements with the
Fund's Custodian, to segregate the underlying securities until the option
either is exercised, expires or the Fund closes out the option as
described below. A covered option sold by the Fund exposes the Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or to possible
continued holding of a security which might otherwise have been sold to
protect against depreciation in the market price of the security. To
limit this exposure, the value of the portfolio securities underlying
covered call options written by the Fund will be limited to an amount not
in excess of 20% of the value of the Fund's net assets at the time such
options are written.
The Fund will purchase call options only to close out open positions.
To close out a position, the Fund may make a "closing purchase
transaction," which involves purchasing a call option on the same security
with the same exercise price and expiration date as the option which it
has previously written on a particular security. The Fund will realize a
profit (or loss) from a closing purchase transaction if the amount paid to
purchase a call option is less (or more) than the amount received from the
sale thereof.
Illiquid Securities. The Fund may invest up to 15% of the value of
its net assets in securities which are illiquid securities. Illiquid
securities are securities which are not readily marketable, including
those with restrictions on resale. Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), permits certain resales of
restricted securities to qualified institutional buyers without
registration under the Securities Act ("Rule 144A Securities"). Because
it is not possible to predict with assurance how the market for Rule 144A
Securities will develop, the Fund's Board has directed the Manager to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information, and has approved procedures to
determine whether a readily available market exists. Rule 144A Securities
for which there is a readily available market are not illiquid.
When the Fund purchases securities that are illiquid due to the fact
that such securities have not been registered under the Securities Act,
the Fund will endeavor to obtain the right to registration at the expense
of the issuer. Generally, there will be a lapse of time between the
Fund's decision to sell any such securities and the registration of the
securities permitting sale. The valuation of illiquid securities will be
monitored by the Manager subject to the supervision of the Fund's Board.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 16 as fundamental policies. These
restrictions cannot be changed without approval by the holders of a
majority, as defined in the Investment Company Act of 1940 (the "Act"), of
the Fund's outstanding voting shares. Investment restrictions numbered 17
and 18 are not fundamental policies and may be changed by vote of a
majority of the Fund's Directors at any time.
1. The Fund's special considerations described under "Special
Considerations" in the Fund's Prospectus will not be changed or
supplemented.
2. The Fund may not purchase the securities of any issuer if such
purchase would cause more than 5% of the value of its total assets to be
invested in securities of such issuer (except securities of the United
States Government or any instrumentality thereof).
3. The Fund may not purchase the securities of any issuer if such
purchase would cause the Fund to hold more than 10% of the outstanding
voting securities of such issuer.
4. The Fund may not purchase securities of any company having less
than three years' continuous operating history (including that of any
predecessors), if such purchase would cause the value of the Fund's
investments in all such securities to exceed 5% of the value of its net
assets. See also Investment Restriction No. 10.
5. The Fund may not purchase securities of closed-end investment
companies except in connection with a merger or consolidation of portfolio
companies. The Fund shall not purchase or retain securities issued by
open-end investment companies other than itself.
6. The Fund may not purchase or retain the securities of any issuer
if officers or directors of the Fund or of its investment adviser, who own
beneficially more than 1/2 of 1% of the securities of such issuer together
own beneficially more than 5% of the securities of such issuer.
7. The Fund may not purchase, hold or deal in commodities or
commodity contracts, in oil, gas, or other mineral exploration or
development programs, or in real estate but this shall not prohibit the
Fund from investing, consistent with Investment Restriction 18 below, in
securities of companies engaged in oil, gas or mineral investments or
activities. This limitation shall not prevent the Fund from investing in
securities issued by a real estate investment trust, provided that such
trust is not permitted to invest in real estate or in interests other than
mortgages or other security interests.
8. The Fund may not borrow money, except to the extent permitted
under the Act.
9. The Fund may not make loans other than by the purchase,
consistent with Investment Restriction 18 below, of bonds, debentures or
other debt securities of the types commonly offered privately and
purchased by financial institutions. The purchase of a portion of an
issue of publicly distributed debt obligations shall not constitute the
making of loans.
10. The Fund may not act as an underwriter of securities of other
issuers.
11. The Fund may not purchase from or sell to any of its officers or
directors, or firms of which any of them are members, any securities
(other than capital stock of the Fund), but such persons or firms may act
as brokers for the Fund for customary commissions.
12. The Fund may not invest in the securities of a company for the
purpose of exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in accordance with
its views.
13. The Fund may not purchase securities on margin, but the Fund may
obtain such short-term credit as may be necessary for the clearance of
purchases and sales of securities.
14. The Fund may not sell any security short or engage in the
purchase and sale of put, call, straddle, or spread options or
combinations thereof, or in writing such options, except that the Fund may
write and sell covered call option contracts on securities owned by the
Fund up to, but not in excess of, 20% of the market value of its net
assets at the time such option contracts are written. The Fund may also
purchase call options for the purpose of terminating its outstanding
obligations with respect to securities upon which covered call option
contracts have been written. In connection with the writing of covered
call options, the Fund may pledge assets to an extent not greater than 20%
of the market value of its total net assets at the time such options are
written.
15. The Fund may not concentrate its investments in any particular
industry or industries, except that the Fund may invest up to 25% of the
value of its total assets in a single industry.
16. The Fund may not purchase warrants in excess of 2% of the value
of its net assets. Such warrants shall be valued at the lower of cost or
market, except that warrants acquired by the Fund in units or attached to
securities shall be deemed to be without value, for purposes of this
restriction only.
17. The Fund may not pledge, mortgage, hypothecate or otherwise
encumber its assets, except to the extent necessary to secure permitted
borrowings.
18. The Fund may not enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase securities
which are illiquid if, in the aggregate, more than 15% of the value of the
Fund's net assets would be so invested.
If a percentage restriction is adhered to at the time of investment,
a later increase or decrease in percentage resulting from a change in
values or assets will not constitute a violation of that restriction.
In addition, the Fund has adopted the following policies as non-
fundamental policies. The Fund intends (i) to comply with the
diversification requirements prescribed in regulations under Section
817(h) of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) to comply in all material respects with insurance laws and
regulations applicable to investments of separate accounts of
Participating Insurance Companies.
MANAGEMENT OF THE FUND
Directors and officers of the Fund are shown below, together with
information as to their principal business occupation during at least the
last five years. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
CLIFFORD L. ALEXANDER, JR., Director. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981,
Mr. Alexander served as Secretary of the Army and Chairman of the
Board of the Panama Canal Company and from 1975 to 1977, he was a
member of the Washington, D.C. law firm of Verner, Liipfert,
Bernhard, McPherson and Alexander. He is a director of American
Home-Products Corporation, The Dun & Bradstreet Corporation,
Equitable Resources, Inc., a producer and distributor of natural gas
and crude petroleum, MCI Communications Corporation and Mutual of
America Life Insurance Company. Mr. Alexander is also a Board member
of 17 other funds in the Dreyfus Family of Funds. He is 61 years old
and his address is 400 C Street N.E., Washington, D.C. 20002.
LUCY WILSON BENSON, Director. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of
COMSAT Corporation, General Re Corporation and Logistics Management
Institute. She is also a Trustee of the Alfred P. Sloan Foundation,
Vice Chairman of the Board of Trustees of Lafayette College, Vice
Chairman of the Citizens Network for Foreign Affairs, and a member of
the Council on Foreign Relations. Mrs. Benson served as a consultant
to the U.S. Department of State and to SRI International from 1980 to
1981. From 1977 to 1980, she was Under Secretary of State for
Security Assistance, Science and Technology. Mrs. Benson is also a
Board member of 13 other funds in the Dreyfus Family of Funds. She
is 67 years old and her address is 46 Sunset Avenue, Amherst,
Massachusetts 01002.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 31, 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and until
August 1994, the Fund's distributor. From August 1994 to December
31, 1994, he was a director of Mellon Bank Corporation. Mr.
DiMartino is a director and former Treasurer of The Muscular
Dystrophy Association; a trustee of Bucknell University; Chairman of
the Board of Directors of the Noel Group, Inc.; a director of
HealthPlan Corporation; a director of Belding Heminway Company, Inc.;
and a director of Curtis Industries, Inc. Mr. DiMartino is also a
Board member of 93 other funds in the Dreyfus Family of Funds. He is
51 years old and his address is 200 Park Avenue, New York, New York
10166.
PETER C. GOLDMARK, JR., Director. Since July 1988, President of The
Rockefeller Foundation, an organization which promotes research and
educational activities. He is also a trustee of The Rockefeller
Foundation and a director of Knight-Ridder Corp. From 1985 to 1988,
Mr. Goldmark was Senior Vice President of Times Mirror Company and
from 1977 to 1985 he was Executive Director of The Port Authority of
New York and New Jersey. Mr. Goldmark is also a Board member of one
other fund in the Dreyfus Family of Funds. He is 54 years old and
his address is 420 Fifth Avenue, New York, New York 10018.
JOSIE CRUZ NATORI, Director. Since 1977, President of The Natori Company,
a fashion design company. She sits on the Board of Trustees of
Manhattanville College, the Board of Directors of the Educational
Foundation of Fashion Industries and on the Boards of The Philippine
American Foundation, Calyx & Corolla and Junior Achievement, Inc.
Additionally, she is an active member of the Young Presidents
Organization, the Committee of 200 and the Fashion Group
International. Ms. Natori is also a Board member of one other fund
in the Dreyfus Family of Funds. She is 47 years old and her address
is 40 East 34th Street, New York, New York 10016.
The Fund typically pays its Directors an annual retainer and
reimburses them for their expenses. The Chairman of the Board receives an
additional 25% of such compensation. For the fiscal year ended December
31, 1994, the aggregate amount of fees and expenses received by each
Director from the Fund and all other funds in the Dreyfus Family of Funds
for which such person is a Board member were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Member
____________________ ________________ __________________ ____________________ _________________
<S> <C> <C> <C> <C>
Clifford L. Alexander $2,500 none none $ 73,210
Lucy Wilson Benson $2,500 none none $ 64,459
Joseph S. DiMartino** $3,125 none none $445,000
Peter C. Goldmark $2,500 none none $ 12,459
Josie Cruz Natori $2,500 none none $ 12,459
</TABLE>
* Amount does not include reimbursed expenses for attending Board
Meetings, which amounted to $1,748 for all Directors as a group.
** Estimated amounts for the current fiscal year ending December 31,
1995.
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Directors of the Fund
who are not "interested persons" of the Fund, as defined in the Act, will
be selected and nominated by the Directors who are not "interested
persons" of the Fund.
The fees paid to the Directors of the Fund are higher than those paid
by most investment companies and are paid for what the Board deems to be
its additional responsibilities, as described under "Special
Considerations-The Investment Selection Process" in the Fund's Prospectus.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer and a Director of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., a wholly-owned subsidiary of The
Boston Company, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President -
General Counsel of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
From August 1990 to February 1992, he was employed as an Associate at
Ropes & Gray, and prior to August 1990, he was employed as an
Associate at Sidley & Austin. He is 30 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From September 1992 to
August 1994, he was an attorney with the Board of Governors of the
Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. From 1988 to August
1994, he was manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 years old.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by
Dreyfus. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in
the Corporate Finance and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor
and an officer of other investment companies advised or administered
by Dreyfus. From 1984 to July 1994, he was Assistant Vice President
in the Mutual Fund Accounting Department of Dreyfus. He is 59 years
old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Dreyfus. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992,
he was a mutual fund accountant, for The Boston Company Advisors,
Inc. He is 28 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Dreyfus. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
She is 50 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of common stock outstanding on February 8, 1995.
The following persons are known by the Fund to own of record 5% or
more of the Fund's outstanding voting securities on February 8, 1995:
Nationwide Variable Account II, P.O. Box 182029, Columbus, Ohio 43218--
74.4%; and Transamerica Occidental Life Insurance Company Separate Account
VA-2L, 1150 South Olive Street, Los Angeles, California 90015--16.8%. A
shareholder that owns, directly or indirectly, 25% or more of the Fund's
voting securities may be deemed to be a "control person" (as defined in
the Act) of the Fund.
INVESTMENT ADVISORY AGREEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
Management Agreement. The Manager provides investment advisory
services pursuant to the Management Agreement (the "Agreement") dated
August 2, 1994, between the Manager and the Fund which is subject to
annual approval by (i) the Board of Directors of the Fund or (ii) vote of
a majority (as defined in the Act) of the outstanding voting securities of
the Fund, provided that in either event the continuance also is approved
by a majority of the Board of Directors who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The Board
of Directors, including a majority of the Directors who are not
"interested persons", approved the Agreement at a meeting held on May 26,
1994. Shareholders approved the Agreement on August 2, 1994. The
Agreement is terminable without penalty, on 60 days' notice, by the Board
of Directors of the Fund or by vote of the holders of a majority of the
Fund's shares, or, upon not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically in the event of its assignment (as
defined in the Act).
As compensation for the Manager's services to the Fund, under the
Agreement the Fund has agreed to pay the Manager a fee, computed monthly,
at an annual rate of .75 of 1% of the Fund's average daily net assets.
All fees and expenses are accrued daily and deducted before declaration of
dividends to shareholders. Prior to August 2, 1994, the Manager provided
investment advisory services to the Fund pursuant to an Investment
Advisory Agreement with the Fund (the "Prior Advisory Agreement") dated
July 29, 1992. Pursuant to the Prior Advisory Agreement, the Fund agreed
to pay the Manager an advisory fee at the annual rate of .65 of 1% of the
Fund's average daily net assets up to $200 million; .55 of 1% of the
Fund's average daily net assets for the next $100 million; and .375 of 1%
of the Fund's average daily net assets in excess of $300 million. For the
period October 7, 1993 (commencement of operations) through December 31,
1993, and for the fiscal year ended December 31, 1994, no investment
advisory fee was paid by the Fund pursuant to undertakings by the Manager.
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board of Directors; Robert E. Riley,
President, Chief Operating Officer and a Director; Daniel C. Maclean III,
General Counsel and Vice President; Elie M. Genadry, Vice President--
Institutional Sales; Henry D. Gottmann, Vice President--Retail Sales and
Service; Jeffrey N. Nachman, Vice President--Fund Administration; Philip
L. Toia, Vice Chairman--Operations and Administration; Lawrence S. Kash,
Vice Chairman--Distribution and a director; Barbara E. Casey, Vice
President--Retirement Services; Diane M. Coffey, Vice President--Corporate
Communications; Katherine C. Wickham, Vice President--Human Resources;
Maurice Bendrihem--Controller; Mark N. Jacobs, Vice President--Legal and
Secretary; and Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman,
Lawrence M. Greene, Julian M. Smerling and David B. Truman, Directors.
Sub-Investment Advisory Agreement. NCM provides sub-investment
advisory services pursuant to a Sub-Investment Advisory Agreement dated
August 2, 1994 between the Manager and NCM. The Sub-Investment Advisory
Agreement is subject to annual approval by (i) the Board of Directors of
the Fund or (ii) vote of a majority (as defined in the Act) of the Fund's
outstanding voting securities, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of any party to the Sub-
Investment Advisory Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. The Board of Directors,
including a majority of the Directors who are not "interested persons",
approved the Sub-Investment Advisory Agreement at a meeting held on May
26, 1994. Shareholders approved the Sub-Investment Advisory Agreement on
August 2, 1994. The Sub-Investment Advisory Agreement is terminable
without penalty, on 60 days' notice, by the Manager, by the Board of
Directors of the Fund or by vote of the holders of a majority of the
Fund's shares, or, upon not less than 90 days' notice, by NCM. The
Sub-Investment Advisory Agreement will terminate automatically in the
event of its assignment (as defined in the Act). In addition, if the
Management Agreement terminates for any reason, the Sub-Investment
Advisory Agreement will terminate effective upon the date the Management
Agreement terminates.
As compensation for NCM's services under the Agreement, the Manager
has agreed to pay NCM a fee, payable monthly, at an annual rate as set
forth in the Fund's Prospectus.
Prior to August 2, 1994, Tiffany Capital Advisors, Inc. ("Tiffany")
served as the Fund's sub-investment adviser pursuant to a sub-investment
advisory agreement (the "Prior Sub-Advisory Agreement") dated July 29,
1992 between Tiffany and the Fund. Pursuant to the Prior Sub-Advisory
Agreement, the Fund agreed to pay Tiffany a sub-investment advisory fee at
the annual rate of .10 of 1% of the Fund's average daily net assets up to
$200 million; .20 of 1% of the Fund's average daily net assets for the
next $100 million; and .375 of 1% of the Fund's average daily net assets
in excess of $300 million. The sub-investment advisory fee payable by the
Fund pursuant to the Prior Sub-Advisory Agreement for the period October
7, 1993 (commencement of operations) through December 31, 1993, and for
the period January 1, 1994 through August 1, 1994, was $132 and $2,200,
respectively. However, for the period January 1, 1994 through August 1,
1994, no sub-investment advisory fee was paid by the Fund pursuant to an
undertaking by Tiffany.
The following persons are officers and/or directors of NCM: Maceo K.
Sloan, Chairman, President and Chief Executive Officer; Justin F. Beckett,
Executive Vice President and Director; Peter J. Anderson, Director; Morris
Goodwin, Jr., Director; Edith H. Noel, Senior Vice President, Corporate
Secretary and Treasurer; Dennis M. McCaskill, Jr., Senior Vice President;
Clifford D. Mpare, Jr., Senior Vice President-Investments; David C.
Carter, Mary M. Ford, Stephon A. Jackson, Stanley G. Laborde, Linda
Jordan, Victor Ross, Wendell Mackey, Lorenzo Newsome and Lawrence Verny,
Vice Presidents; Deborah C. Bronson, Vice President-Director of
Operations; Terrence S. Laster, Assistant Vice President; and Marc Reid,
Assistant Vice President-Manager of Marketing and Client Services.
NCM provides day-to-day management of the Fund's portfolio of
investments in accordance with the stated policies of the Fund, subject to
the supervision of the Manager and the approval of the Fund's Board of
Directors. The Manager and NCM provide the Fund with Portfolio Managers
who are authorized by the Directors to execute purchases and sales of
securities. The Fund's Portfolio Managers are Diane M. Coffey, Thomas A.
Frank, James P. Ruskin, Maceo K. Sloan, James Stanley, and Howard Stein.
The Manager also maintains a research department with a professional staff
of portfolio managers and securities analysts who provide research
services for the Fund as well as for other funds advised by the Manager.
All purchases and sales are reported for the Directors' review at the
meeting subsequent to such transactions.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Redemption Commitment. The Fund has committed itself to pay in cash
for all redemption requests by any shareholder of record, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the
value of the Fund's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the Securities and
Exchange Commission. In the case of requests for redemption in excess of
such amount, the Board of Directors reserves the right to make payments in
whole or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In this event,
the securities would be valued in the same manner as the portfolio of the
Fund. If the recipient sold such securities, brokerage charges would be
incurred.
Suspension of Redemption. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund normally utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities, including
warrants and covered call options written, are valued at the last sales
price on the securities exchange on which the securities primarily are
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average
of the most recently reported bid and asked prices. Market quotations of
foreign securities in foreign currencies are translated into U.S. dollars
at the prevailing rates of exchange. Any securities or other assets for
which market quotations are not readily available are valued at fair value
as determined in good faith by the Board of Directors. The Board of
Directors will review the method of valuation on a regular basis. In
making their good faith valuation, the Board will generally take the
following into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board of Directors if they believe that it no longer
reflects the value of the restricted securities. Restricted securities
not of the same class as securities for which a public market exists will
usually be valued initially at cost. Any subsequent adjustments from cost
will be based upon considerations deemed relevant by the Board of
Directors. Expenses and fees, including the advisory fees, are accrued
daily and taken into account for the purpose of determining the net asset
value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund reimburses Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, for certain allocated expenses
with respect to servicing and/or maintaining shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Directors cast in person at a meeting called
for the purpose of voting on the Plan. The Plan is terminable at any time
by vote of a majority of the Directors who are not "interested persons" of
the Fund and have no direct or indirect financial interest in the
operation of the Plan.
For the fiscal year ended December 31, 1994, no amount was charged to
the Fund under the Plan.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Since its inception, the Fund has qualified as a "regulated
investment company" under Subchapter M of the Code. The Fund intends to
continue to so qualify if such qualification is in the best interests of
the Participating Insurance Companies. Qualification as a "regulated
investment company" relieves the Fund of any liability for Federal income
taxes to the extent its net investment income and net realized capital
gains are distributed in accordance with applicable provisions of the
Code. Among the requirements for such qualification is that less than 30%
of the Fund's income be derived from gains from the sale or other
disposition of securities held for less than three months, the Fund must
pay out to its shareholders at least 90% of its net income (consisting of
net investment income and net short-term capital gain) and must meet
certain asset diversification and other requirements. Accordingly, the
Fund may be restricted in selling of securities held for less than three
months, and in the utilization of certain of the investment techniques
described in the Prospectus. The Code, however, allows the Fund to net
certain offsetting positions, making it easier for the Fund to satisfy the
30% test. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency. The Fund may be subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of investment
income and capital gains. If the Fund does not qualify as a "regulated
investment company," however, it will be subject to the general rules
governing the federal income taxation of corporations under the Code.
Section 817(h) of the Code requires that the investments of a
segregated asset account of an insurance company be "adequately
diversified" as provided therein or in accordance with U.S. Treasury
Regulations in order for the account to serve as the basis for VA
contracts or VLI policies. The Fund intends to comply with applicable
requirements so that the Fund's investments are "adequately diversified"
for this purpose. Section 817(h) and the U.S. Treasury Regulations issued
thereunder provide the manner in which a segregated asset account will
treat investments in a regulated investment company for purposes of the
diversification requirements. If a Fund satisfies certain conditions, a
segregated asset account owning shares of the Fund will be treated as
owning multiple investments consisting of the account's proportionate
share of each of the assets of the Fund. The Fund intends to satisfy
these conditions so that the shares of the Fund owned by a segregated
asset account of a Participating Insurance Company will be treated as
multiple investments. If, however, the Fund is not "adequately
diversified" within the meaning of Section 817(h) of the Code, the VA
contracts and VLI policies supported by the Fund would not be treated as
annuity or life insurance contracts, as the case may be, for any period
(or subsequent period) during which the Fund is not "adequately
diversified".
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gains and losses. However, all or a portion of
the gain or loss realized for the disposition of foreign currency, non-
U.S. dollar denominated debt instruments, and certain financial futures
and options, may be treated as ordinary income or loss under Section 988
of the Code. In addition, all or a portion of the gain realized from the
disposition of certain market discount bonds will be treated as ordinary
income under Section 1276. Finally, all or a portion of the gain realized
from engaging in "conversion transactions" may be treated as ordinary
income under Section 1258. "Conversion transactions" are defined to
include certain forward, futures, option and straddle transactions,
transactions marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by the Fund
from certain financial futures and options transactions (other than those
taxed under Section 988 of the Code) will be treated as 60% long term
capital gain or loss and 40% short term capital gain or loss. Gain or
loss will arise upon the exercise or lapse of such futures and options as
well as from closing transactions. In addition, any such futures or
options remaining unexercised at the end of the Fund's taxable year will
be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner described
above.
Offsetting positions held by the Fund involving financial futures and
options may constitute "straddles." Straddles are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of straddles is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the provisions of
Sections 988 and 1256. As such, all or a portion of any short or long-
term capital gain from certain "Straddle" and/or conversion transactions
may be recharacterized to ordinary income.
If the Fund were treated as entering into straddles by reason of its
futures or options transactions, such straddles could be characterized as
"mixed straddles" if the futures or options transactions comprising such
straddles were governed by Section 1256 of the Code. The Fund may make
one or more elections with respect to "mixed straddles." Depending upon
which elections made, if any, the results to the Fund may differ. If no
election is made, to the extent the straddle rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to
the extent of unrealized gain in any offsetting positions. Moreover, as a
result of the straddle and conversion transaction rules, short term
capital loss on straddle positions may be recharacterized as long term
capital loss, and long term capital gain may be recharacterized as short
term capital gain or ordinary income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders by causing the Fund
to recognize income prior to the receipt of cash payments. For example,
the Fund could be required to recognize annually a portion of the discount
(or deemed discount) at which such securities were issued and to
distribute an amount equal to such income in order to maintain its
qualification as a regulated investment company. In such case, the Fund
may have to dispose of securities which it might otherwise have continued
to hold in order to generate cash to satisfy these distribution
requirements.
Since shareholders of the Fund will be the separate accounts of
Participating Insurance Companies, no discussion is included herein as to
the Federal income tax consequences at the level of the holders of the VA
contracts or VLI policies. For information concerning the Federal income
tax consequences to such holders, see the prospectuses for such VA
contracts or VLI policies.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Fund for the purchase or sale of portfolio securities. Allocation
of brokerage transactions, including their frequency, is made in the best
judgment of the Manager and in a manner deemed fair and reasonable to
shareholders, rather than by any formula. The primary consideration in
all portfolio securities transactions is prompt execution of orders at the
most favorable net price. When this primary consideration is met to the
satisfaction of the Manager, brokers may also be selected because of their
ability to handle special executions such as are involved in large block
trades or broad distributions. Large block trades may, in certain cases,
result from two or more funds advised or administered by the Manager being
engaged simultaneously in the purchase or sale of the same security.
Subject to the primary consideration, particular brokers selected may also
include those who supplement the Manager's and NCM's research facilities
with statistical data, investment information, economic facts and
opinions; sales of Fund shares by a broker may be taken into
consideration. Information so received is in addition to and not in lieu
of services required to be performed by the Manager and NCM and their fees
are not reduced as a consequence of the receipt of such supplemental
information. Such information may be useful to the Manager in serving
both the Fund and other funds which it advises and to NCM in serving both
the Fund and the other accounts it manages, and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Manager and NCM in carrying out their obligations to the
Fund. The overall reasonableness of brokerage commissions paid is
evaluated by the Manager based upon its knowledge of available information
as to the general level of commissions paid by other institutional
investors for comparable services. When transactions are executed in the
over-the-counter market, the Fund will deal with the primary market makers
unless a more favorable price or execution is otherwise obtainable.
Although it is not possible to place a dollar value on the research
services received from brokers who effect transactions in portfolio
securities, it is the opinion of the Manager that these services should
not reduce the overall expenses of its research department.
For its portfolio securities transactions for the period October 7,
1993 (commencement of operations) to December 31, 1993 and for the fiscal
year ended December 31, 1994, the Fund paid total brokerage commissions of
$3,188 and $54,787, respectively, none of which was paid to the
Distributor. For the period October 7, 1993 to December 31, 1993 there
were no spreads or concessions on principal transactions. Concessions on
principal transactions totaled $1,265 for the fiscal year ended December
31, 1994.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Fund's average annual total return for the 1 and 1.236 year
periods ended December 31, 1994 was 1.49% and 7.18%, respectively.
Average annual total return of the Fund is calculated by determining the
ending redeemable value of an investment purchased with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from the result.
The Fund's total return for the period October 7, 1993 (commencement
of operations) to December 31, 1994 was 8.95%. Total return is calculated
by subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end
of the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Shares
of stock are of one class and have equal rights as to voting, redemption,
dividends, and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund currently permits investors to invest in only one portfolio
of securities. The Fund expects that it may in the future, create one or
more additional portfolios of securities, each with a different investment
objective.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671 is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103, as counsel for the Fund, has rendered its opinion as to certain
legal matters in connection with the shares of capital stock being sold
pursuant to the Fund's Prospectus to which this Statement of Additional
Information relates.
Ernst & Young LLP, independent auditors, 787 Seventh Avenue, New
York, New York 10019 have been selected as auditors of the Fund.
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
COMMON STOCKS--55.8% SHARES VALUE
--------------------------
<S> <C> <C> <C>
BASICS--3.1% American Barrick Resources.............. 3,000 $ 66,750
British Steel, A.D.S. ................. 1,700 41,225
Cleveland-Cliffs....................... 1,500 55,500
Nucor.................................. 1,200 66,600
Praxair................................ 3,700 75,850
Santa Fe Pacific Gold.................. (a) 1,680 21,630
----------
327,555
----------
CONSUMER CYCLICAL--8.8% American Stores....................... 3,100 83,313
Clayton Homes.......................... 3,750 59,063
Disney (Walt).......................... 3,100 142,988
Dollar General......................... 4,775 143,250
Grainger (W.W.)........................ 1,400 80,850
Heilig-Meyers.......................... 2,100 53,025
Leggett & Platt........................ 1,500 52,500
Lennar................................. 3,200 49,600
Lowe's................................. 1,300 45,175
Oxford Industries...................... 1,900 41,562
Penney (J.C.).......................... 1,200 53,550
Pier 1 Imports......................... 7,700 72,187
Wal-Mart Stores........................ 1,900 40,375
----------
917,438
----------
CONSUMER STAPLES--11.7% ALZA................................... (a) 1,800 32,400
Amgen................................ (a) 1,700 100,300
Becton, Dickinson...................... 1,700 81,600
Coca-Cola.............................. 2,500 128,750
Colgate-Palmolive...................... 2,100 133,088
Columbia/HCA Healthcare................ 1,800 65,700
Cordis............................... (a) 1,500 90,750
Forest Laboratories.................. (a) 1,300 60,613
Genelabs Technologies................ (a) 5,200 6,175
Gillette............................... 1,000 74,750
HealthCare COMPARE................... (a) 1,900 64,837
Medtronic.............................. 1,200 66,750
Merck & Co. ........................... 6,500 247,812
NovaCare............................. (a) 4,000 29,000
Vallen............................... (a) 2,300 31,625
----------
1,214,150
----------
ENERGY--.8% Anadarko Petroleum..................... 500 19,250
Tosco.................................. 2,100 61,163
----------
80,413
----------
FINANCE--8.2% ADVANTA, Cl. A......................... 2,000 52,500
AFLAC.................................. 3,700 118,400
American International Group........... 1,500 147,000
Dean Witter, Discover & Co. ........... 700 23,713
Federal National Mortgage Association.. 1,700 123,887
First Chicago.......................... 1,300 62,075
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- ------------
FINANCE (CONTINUED) Green Tree Financial.................... 2,000 $ 60,750
Midlantic.............................. 2,300 60,950
NationsBank............................ 1,400 63,175
PXRE................................... 1,100 31,075
State Street Boston.................... 1,400 40,075
T. Rowe Price Association.............. 2,300 69,000
----------
852,600
----------
INDUSTRIAL--6.5% AGCO................................... 2,700 82,012
Armstrong World Industries............. 1,200 46,200
Briggs & Stratton...................... 1,000 32,750
Clark Equipment...................... (a) 1,100 59,675
Cummins Engine......................... 1,300 58,825
Deere & Co. ........................... 800 53,000
Eaton.................................. 1,400 69,300
Federal-Mogul.......................... 2,200 44,275
Fluor.................................. 1,100 47,438
Ingersoll-Rand......................... 2,200 69,300
Magna International, Cl. A............. 1,400 53,725
Miller (Herman)........................ 2,300 60,375
----------
676,875
----------
TECHNOLOGY--10.7% Applied Materials...................... (a) 1,400 59,150
BMC Software......................... (a) 1,900 108,062
Compaq Computer...................... (a) 1,600 63,200
Computer Associates International...... 2,100 101,850
E-Systems.............................. 2,000 83,250
EMC.................................. (a) 7,400 160,025
Hewlett-Packard........................ 1,600 159,800
Linear Technology...................... 1,500 74,250
Motorola............................... 1,600 92,600
Oracle Systems....................... (a) 1,800 79,425
Seagate Technology................... (a) 3,000 72,000
Texas Instruments...................... 800 59,900
----------
1,113,512
----------
TRANSPORTATION--1.8% Airborne Freight ....................... 1,900 38,950
Santa Fe Pacific....................... 2,800 49,000
Southwest Airlines..................... 2,500 41,875
Union Pacific.......................... 1,200 54,750
----------
184,575
----------
UTILITIES--4.2% AT & T.................................. 2,900 145,725
Ameritech.............................. 3,400 137,275
SBC Communications..................... 1,800 72,675
Sprint................................. 2,900 80,112
----------
435,787
----------
TOTAL COMMON STOCKS
(cost $5,920,488).................... $5,802,905
==========
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PRINCIPAL
SHORT-TERM INVESTMENTS--42.4% AMOUNT VALUE
------------ --------------
U.S. TREASURY BILLS:
5.17%, 2/2/95.......................... $ 224,000 $ 222,971
4.85%, 2/9/95.......................... 4,076,000 4,054,584
5.30%, 3/9/95.......................... 140,000 138,619
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,416,174).................... $4,416,174
==========
TOTAL INVESTMENTS (cost $10,336,662) ................................ 98.2% $10,219,079
===== ===========
CASH AND RECEIVABLES (NET) ......................................... 1.8% $ 187,202
===== ===========
NET ASSETS.................................................................. 100.0% $10,406,281
===== ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $10,336,662)_see statement........................................................ $10,219,079
Cash...................................................................................... 151,531
Dividends receivable...................................................................... 10,764
Prepaid expenses.......................................................................... 52,813
Due from The Dreyfus Corporation.......................................................... 1,215
-----------
10,435,402
LIABILITIES;
Accrued expenses.......................................................................... 29,121
-----------
NET ASSETS ........................................................................ $10,406,281
===========
REPRESENTED BY:
Paid-in capital........................................................................... $10,587,569
Accumulated distributions in excess of investment income_net.............................. (2,009)
Accumulated net realized (loss) on investments............................................ (61,696)
Accumulated net unrealized (depreciation) on investments_Note 3........................... (117,583)
-------------
NET ASSETS at value applicable to 786,711 shares outstanding
(150 million shares of $.001 par value Common Stock authorized)........................... $10,406,281
===========
NET ASSET VALUE, offering and redemption price per share
($10,406,281 / 786,711 shares)............................................................ $13.23
======
See notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $219 foreign taxes withheld at source)......... $ 169,021
Interest.............................................................. 109,701
----------
TOTAL INCOME.................................................... $ 278,722
EXPENSES:
Investment advisory fee_Note 2(a)..................................... 41,102
Sub-investment advisory fee_Note 2(a)................................. 2,200
Legal fees............................................................ 57,909
Organization expenses................................................. 15,273
Directors' fees and expenses_Note 2(c)................................ 11,775
Auditing fees......................................................... 11,174
Shareholder servicing costs_Note 2(b)................................. 9,643
Prospectus and shareholders' reports.................................. 6,433
Custodian fees........................................................ 5,119
Registration fees..................................................... 3,116
Miscellaneous......................................................... 1,017
----------
164,761
Less_expense reimbursement from Dreyfus and Tiffany due to
undertakings_Note 2(a)............................................ 150,327
----------
TOTAL EXPENSES.................................................. 14,434
----------
INVESTMENT INCOME--NET.......................................... 264,288
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments_Note 3............................... $ (61,713)
Net unrealized (depreciation) on investments............................ (146,700)
----------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (208,413)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 55,875
==========
See notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
-----------------------------
1993* 1994
------------ ----------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 3,558 $ 264,288
Net realized gain (loss) on investments................................. 17 (61,713)
Net unrealized appreciation (depreciation) on investments for the year.. 29,117 (146,700)
------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 32,692 55,875
------------ ----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income_net................................................... (3,904) (265,951)
------------ ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 1,471,438 10,922,467
Dividends reinvested.................................................... 3,904 265,951
Cost of shares redeemed................................................. (232,432) (1,943,759)
------------ ----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 1,242,910 9,244,659
------------ ----------
TOTAL INCREASE IN NET ASSETS...................................... 1,271,698 9,034,583
NET ASSETS:
Beginning of year....................................................... 100,000 1,371,698
------------ ----------
End of year (including distributions in excess of investment income_net of ($346)
in 1993 and ($2,009) in 1994, respectively).......................... $ 1,371,698 $10,406,281
============ ===========
SHARES SHARES
------------ ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 112,080 808,182
Shares issued for dividends reinvested.................................. 292 20,087
Shares redeemed......................................................... (17,869) (144,061)
------------ ----------
NET INCREASE IN SHARES OUTSTANDING.................................... 94,503 684,208
============ ===========
* From October 7, 1993 (commencement of operations) to December 31, 1993.
See notes to financial statements.
</TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Fund's Prospectus dated May 1, 1995.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH 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 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") served as the
Fund's sub-investment adviser until August 1, 1994. On August 2, 1994, the
Fund's shareholders approved a new sub-investment advisory agreement between
Dreyfus and NCM Capital Management Group, Inc. to replace the existing
sub-investment advisory agreement between the Fund and Tiffany. Prior to
August 24, 1994, the Dreyfus Service Corporation, a wholly-owned subsidiary
of Dreyfus, acted as the exclusive distributor of the Fund's shares, which
are sold without a sales charge. Effective August 24, 1994, Dreyfus 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: 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, 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 $51,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1994. If not
applied, the carryover expires in 2002.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH
AFFILIATES:
(A) Pursuant to a new Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate
of .75 of 1% of the average daily value of the Fund's net assets and is
payable monthly. Pursuant to a new Sub-Investment Advisory Agreement with NCM
Capital Management Group, Inc., the sub-investment advisory fee is computed
at an annual rate of .10 of 1% on the first $500 million and .20 of 1% on the
excess of the average daily value of the Fund's net assets and is payable
monthly by Dreyfus.
Fees payable by the Fund prior to August 2, 1994 pursuant to the
provisions of an Investment Advisory Agreement with Dreyfus and a
Sub-Investment Advisory Agreement with Tiffany were paid 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 Investment Advisory Agreement further provides 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 fee to be paid to Dreyfus, or Dreyfus will bear,
such excess expense to the extent required by state law. However, Dreyfus and
Tiffany had undertaken from January 1, 1994 through December 31, 1994
(through August 1, 1994 for Tiffany) 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 year ended December 31,
1994 (through August 1, 1994 for Tiffany), which amounted to $41,102 and
$2,200, respectively. In addition, Dreyfus had undertaken through December
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 exceeded an annual rate of .25 of 1% of the Fund's average
daily net assets. Dreyfus has currently undertaken to reduce the investment
advisory fee paid by the Fund, to the extent that the Fund's aggregate
expenses (excluding certain expenses as described above) exceed specified
annual percentages of the Fund's average daily net assets. The expense
reimbursement, pursuant to the undertakings, amounted to $107,025 for the
year ended December 31, 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 Investment Advisory Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation 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 year ended December 31, 1994, no amounts were charged to the Fund
pursuant to the Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Investment Adviser
and/or Dreyfus Service Corporation. Each director who is not an "affiliated
person" receives an annual fee of $2,500.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the year ended December 31, 1994,
amounted to $17,367,750 and $12,180,849, respectively.
At December 31, 1994, accumulated net unrealized depreciation on
investments was $117,583, consisting of $327,870 gross unrealized
appreciation and $445,453 gross unrealized depreciation.
At December 31, 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.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
We have audited the accompanying statement of assets and liabilities of
The Dreyfus Socially Responsible Growth Fund, Inc., including the statement
of investments, as of December 31, 1994, 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 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 December 31, 1994 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Dreyfus Socially Responsible Growth Fund, Inc. at December
31, 1994, 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.
(Logo Signature)
New York, New York
February 1, 1995
