THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report that the Dreyfus Socially Responsible Growth
Fund, Inc. achieved a total return of 21.23%, based on net asset value, for
the fiscal year ended December 31, 1996* compared to an increase of 22.95%
for the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"),**
indicating competitive performance relative to the market. The positive
results can be attributed to three basic factors: 1) stock selection, 2)
focus on several strong sectors: technology, consumer staples and financials
and 3) avoidance of lower quality companies with potential earnings
disappointments.
ECONOMIC REVIEW
The much-heralded "Goldilocks" phase of the U.S. economy - not too hot
and not too cold - may be ending. First, the slowdown to 2% GDP growth seems
to have been confined to the summer and recent data depict faster growth for
the fourth quarter of 1996. Second, inflation has begun a cyclical climb,
although there is yet little linkage to the tight labor market. The economy
is operating with very little slack near the close of its sixth year of
expansion. Hence, the resumption of faster growth quickly restored a rising
trend to bond yields and pulled short-term rates above their December lows.
As yet there is little expectation of tighter Federal Reserve policy,
although sustained above-trend growth would probably justify higher rates
during 1997. Modest tightening in 1997 would in our opinion help allay
inflation fears and sustain another year of economic growth.
Although the economy grew near its 2.4% long-term trend rate in 1996, it
was nonetheless quite volatile during the year. After a strong first half,
and then the summer slowdown, the return to faster growth late in the year is
not broad based. Strong sectors are in manufacturing, exports, services and
construction. By contrast, some retailers found Christmas sales disappointing
and capital goods orders are mixed. However, inventories are quite lean and
this tilts the odds towards yet another year of growth in 1997. While
corporate profit growth slowed in 1996, profits still generally tended to
surprise on the upside and, we believe, should maintain steady growth in
1997.
Accelerating wage growth in 1996 did not fuel higher prices. And surging
energy prices have failed to lift inflation elsewhere. Indeed, core inflation
(excluding food and energy) decelerated last year. But with oil prices rising
now for a year, their ability to raise the overall price level may become
worrisome at some point, especially if the Fed finds them significant.
We believe the economy has reverted to a period of modest growth above
the long-term average. Key issues are whether faster growth will fuel higher
inflation and at what point rising oil prices would disturb price stability.
The economy will shortly begin a seventh expansion year and continued
volatility in growth and in sentiment is likely.
MARKET OVERVIEW
The stock market in 1996 was a mixture of agony and ecstasy, with the
accent for most of the year on the more desirable of those two alternatives.
By the end of the year, the S&P had registered a gain of 22.95%, while the
blue chip Dow Jones Industrial Average ("DJIA") gained 28.91%.*** The road
leading to those impressive year-end gains was not a smooth one, however.
The market year began haltingly, in the wake of shaky business conditions
at the end of the previous year. As 1996 unfolded, however, the market picked
up steam. The economy took on characteristics that continued for much of the
year - low inflation, moderate growth and relatively low interest rates. This
was a combination that investors liked, perhaps too much. By midyear,
satisfaction with the economy turned into fear that economic growth might be
overdone.
The prevailing nervousness about potential inflation served to boost
interest rates temporarily, without the need for Federal Reserve
intervention. This was a temporary setback for large capitalization stocks,
but more damaging to Nasdaq issues and particularly to the smaller
capitalization stocks measured by the Russell 2000 Index.
As Summer turned into Fall, interest rates eased and inflation remained
at bay. The benign economic environment allowed many stocks to resume their
upward course, causing a string of record-breaking performances by the DJIA
and other broad market indexes. In mid-Fall the prospect that government
would continue divided in Washington, with a Democratic President and a
Republican-controlled Congress, appeared to be another plus factor for the
market. Stocks continued to surge, hardly pausing for breath when Chairman
Alan Greenspan raised a caution signal in early December by referring to
"irrational exuberance" in the equity markets.
Stock market veterans issued a stream of warnings that what goes up so
strongly and consistently must, at some point, come down. Nonetheless, a
fairly steady flow of new money coming into stocks from people putting money
aside for retirement seemed to be fueling the boom. While, at the very end of
the year, caution caused a softening of stock prices, which backed away from
the year's record of 6560.91 on the DJIA, that record was surpassed in early
1997, when the average surpassed 6700.
Among the best performing groups for 1996 were oil drillers,
semi-conductors, computers, financial enterprises and consumer non-durables.
Corporate earnings were very strong for much of the year, but showed signs of
flagging as the year wore on. This raised questions in the minds of many
market observers whether the scorching pace of the past year could be
maintained.
PORTFOLIO FOCUS
The Fund's rewarding stock selection can be seen from a brief overview of
several of the names that led the way for the year including BMC Software,
3Com, Computer Associates, EMC, Colgate Palmolive, Gillette, CPC
International, Citicorp, Greentree Acceptance Corp. Financial, SunAmercia,
Bank of Boston and Allstate. Each of these names exhibited superior earnings
revisions during the previous six months and because of their earnings
stability were rewarded by investors who remained skittish about the strength
of the economy.
The sector overweighting decisions contributed nicely to performance as
the Fund was weighted heavily in three strong areas. Technology regained
investor attention after a dismal performance in the second quarter as many
came to the conclusion that a slowdown in the capital goods cycle would have
a minimal adverse effect on these companies. We currently intend to continue
to take some profits in this area on strength but will remain overweighted as
we continue to like the long-term picture for Technology. Consumer Staple
stocks continued to attract interest because of the stability of their
earnings although many are beginning to look pricey. The Financial or
Interest-Sensitive stocks benefited from a rebound in the bond market as the
Fed decided to leave rates unchanged and reduce investor anxiety over the
prevalence of inflation in this economy. We currently remain overweighted in
this group as we believe that company-specific fundamentals remain intact and
that the long-term direction of interest rates is lower.
SOCIAL RESPONSIBILITY
The Dreyfus Socially Responsible Growth Fund continues to see positive
results in its effort to invest in a way that enhances the quality of life in
America. We believe that our commitment to social investment is slowly but
surely reaping social dividends. For example, the nation is witnessing a
broad-based attack on the tobacco industry, especially its targeting of
youthful customers. In the fight against tobacco, The Dreyfus Socially
Responsible Growth Fund, along with a growing chorus of forces, including
lawmakers in state and local governments and the American Medical
Association, is calling for the general divestment of tobacco stocks, which,
it should be noted, continue to seriously underperform the S&P 500.
There is also positive news to report on a number of the Fund's core
holdings. BankAmerica was recently named a winner of Business Ethics
magazine's Award for Corporate Social Responsibility and Ethics for general
ethics, environment and community banking. The company has just announced
that it has granted stock options to all employees. Interestingly, the
above-mentioned awards were sponsored by another leader in corporate social
responsibility,
Sears, Roebuck and Co., which the Fund has held for some time. On the
diversity front, two of the Fund's companies, Johnson & Johnson and Disney,
have announced that they will now be extending employee benefits to same-sex
partners, a move which complements the Fund's objectives of ensuring equal
employment opportunity for all Americans.
OUTLOOK
The current outlook for the stock market appears mixed to positive. Low
interest rates, modest economic growth, and continued money flows into mutual
funds bode well for the market. However, somewhat extended valuations, the
possibility of slowing economic growth and slow earnings for individual
companies compared to the prior year give us some concern. We look for 1997
to be a year for much more modest returns from the equity markets than 1996
or 1995 as a result of overall slowing economic conditions. The focus will
continue to be on the ability of investment managers to outperform through
superior stock selection.
We thank you for your confidence in us and look forward to serving you
well in the future.
Sincerely,
<TABLE>
<CAPTION>
<S> <C> <C>
[Stephon A. Jackson, CFA [Maceo K. Sloan, CFA [Eric Steedman
signature logo] signature logo] signature logo]
Stephon A. Jackson, CFA Maceo K. Sloan, CFA Eric Steedman
Portfolio Manager Portfolio Manager Portfolio Manager
NCM Capital NCM Capital The Dreyfus Corporation
Management Group, Inc. Management Group, Inc.
</TABLE>
January 15, 1997
New York, N. Y.
* Total return includes reinvestment of dividends and any capital gains
paid. Figures do not reflect the deduction of any additional charges
applicable to separate accounts of participating insurance companies which
use the Fund as an underlying investment.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment
of income dividends and, where applicable, capital gain distributions. The
Dow Jones Industrial Average (DJIA) is a price-weighted average of 30
actively traded blue chip stocks.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. DECEMBER 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS SOCIALLY
RESPONSIBLE GROWTH FUND, INC. AND THE STANDARD & POOR'S 500 COMPOSITE STOCK
PRICE INDEX
[Exhibit A:
$17,774
Dreyfus Socially
Responsible
Growth Fund
Dollars
$17,528
Standard & Poor's 500
Composite Stock
Price Index*
*Source: Lipper Analytical Services,Inc.]
Average Annual Total Returns
One Year Ended From Inception (10/7/93)
December 31, 1996 to December 31, 1996
____________________ ______________________
21.23% 19.45%
Past performance is not predictive of future performance.
The Fund's performance does not reflect the deduction of additional charges
imposed in connection with investing in variable annuity contracts and
variable life insurance policies.
The above graph compares a $10,000 investment made in The Dreyfus Socially
Responsible Growth Fund, Inc. on 10/7/93 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. For comparative purposes, the value of the Index on 9/30/93 is
used as the beginning value on 10/7/93. All dividends and capital gain
distributions are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses of the Fund. The Standard & Poor's 500 Composite
Stock Price Index is a widely accepted, unmanaged index of overall stock
market performance, which does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1996
Common Stocks-92.6% Shares Value
______ ______
<S> <C> <C> <C>
Consumer Durables-.7% Oakwood Homes.......... 34,600 $ 791,475
______
Consumer Non-Durables-12.2% Clorox........... 23,000 2,308,625
Coca-Cola.............................. 44,800 2,357,600
Colgate-Palmolive...................... 26,600 2,453,850
Gillette.................................... 26,900 2,091,475
Jones Apparel Group.................. (a) 31,200 1,166,100
McCormick & Co......................... 22,600 532,513
NIKE, Cl. B............................ 52,000 3,107,000
______
14,017,163
______
Consumer Services-6.0% BET Holdings, Cl. A... (a) 12,300 353,625
CUC International.................... (a) 70,050 1,663,688
Disney (Walt).......................... 39,900 2,778,037
Regal Cinemas........................ (a) 10,400 319,800
Service Corp. International............ 60,800 1,702,400
______
6,817,550
______
Electronic Technology-13.3% Cisco Systems.... (a) 41,200 2,621,350
Coherent............................. (a) 9,300 392,925
EMC......................................... (a) 42,200 1,397,875
Intel....................................... 19,000 2,487,813
Linear Technology...................... 24,900 1,092,488
Seagate Technology................... (a) 60,000 2,370,000
Sun Microsystems..................... (a) 39,000 1,001,812
3COM (a) 23,900 1,753,662
U.S. Robotics........................ (a) 29,100 2,095,200
______
15,213,125
______
Finance-20.3% AFLAC.......................... 34,900 1,491,975
Allstate............................... 26,700 1,545,263
American International Group........... 18,000 1,948,500
BankAmerica............................ 26,500 2,643,375
Bank of Boston......................... 52,300 3,360,275
Chase Manhattan........................ 13,000 1,160,250
Citicorp............................... 22,900 2,358,700
Federal National Mortgage Association.. 51,400 1,914,650
Green Tree Financial................... 58,300 2,251,837
PNC Bank.................................... 48,300 1,817,287
Summit Bancorp......................... 31,600 1,382,500
SunAmerica............................. 31,000 1,375,625
______
23,250,237
______
Health Technology-10.9% Amgen................ (a) 39,600 2,153,250
Bristol-Myers Squibb................... 20,700 2,251,125
Guidant................................ 21,800 1,242,600
Johnson & Johnson...................... 38,300 1,905,425
Medtronic.............................. 33,100 2,250,800
Merck & Co............................. 34,000 2,694,500
______
12,497,700
______
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Common Stocks (continued) Shares Value
______ ______
Industrial Services-1.4% Schlumberger........ 7,000 $ 699,125
Seitel...................................... (a) 23,300 932,000
______
1,631,125
______
Process Industries-2.9% Avery Dennison....... 37,600 1,330,100
Bemis....................................... 55,000 2,028,125
______
3,358,225
______
Producer Manufacturing-1.9% Dover............ 44,100 2,216,025
______
Retail Trade-6.9% Consolidated Stores........ (a) 50,625 1,626,328
OfficeMax............................ (a) 102,800 1,092,250
Safeway..................................... (a) 45,000 1,923,750
Sears, Roebuck & Co.................... 53,100 2,449,238
Viking Office Products............... (a) 31,600 843,325
______
7,934,891
______
Technology Services-10.6% Arrow Electronics.. (a) 28,500 1,524,750
BMC Software......................... (a) 54,000 2,234,250
Computer Associates International...... 37,300 1,855,675
Microsoft............................ (a) 48,000 3,966,000
Oracle...................................... (a) 60,800 2,538,400
______
12,119,075
______
Transportation-2.0% Comair Holdings.......... 48,900 1,173,600
Federal Express...................... (a) 24,200 1,076,900
______
2,250,500
______
Utilities-3.5% CMS Energy.................... 21,900 736,388
Century Telephone Enterprises.......... 43,400 1,339,975
360 Communications..................... 32,900 760,812
WorldCom............................. (a) 42,600 1,110,262
______
3,947,437
______
TOTAL COMMON STOCKS
(cost $94,601,003)................... $106,044,528
======
Principal
Short-Term Investment-7.9% Amount
______
U.S. Treasury Bill; 4.95%, 3/6/1997
(cost $9,045,634).............................. $ 9,126,000 $ 9,045,509
======
TOTAL INVESTMENTS (cost $103,646,637)....................................... 100.5% $115,090,037
==== ======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.5%) $ (520,044)
==== ======
NET ASSETS.................................................................. 100.0% $114,569,993
==== ======
Notes to Statement of Investments:
(a) Non-income producing.
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
______ ______
ASSETS: Investments in securities-See Statement of Investments $103,646,637 $115,090,037
Cash....................................... 159,239
Dividends receivable....................... 60,919
Prepaid expenses........................... 24,922
______
115,335,117
______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 78,604
Payable for Common Stock redeemed.......... 608,667
Accrued expenses........................... 77,853
______
765,124
______
NET ASSETS.................................................................. $114,569,993
======
REPRESENTED BY: Paid-in capital............................ $102,861,347
Accumulated undistributed investment income-net42,432
Accumulated net realized gain (loss) on investments 222,814
Accumulated net unrealized appreciation (depreciation)
....................... on investments-Note 4 11,443,400
______
NET ASSETS.................................................................. $114,569,993
======
SHARES OUTSTANDING
(150 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED)............. 5,704,191
NET ASSET VALUE, offering and redemption price per share.................... $20.09
===
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME: Cash dividends (net of $3,103 foreign taxes
withheld at source).................... $ 719,847
Interest................................... 240,728
_____
Total Income......................... $ 960,575
EXPENSES: Investment advisory fee-Note 3(a).......... 522,795
Legal fees................................. 40,421
Auditing fees.............................. 31,587
Registration fees.......................... 22,928
Directors' fees and expenses-Note 3(c)..... 13,678
Custodian fees-Note 3(b)................... 13,069
Prospectus and shareholders' reports....... 12,366
Shareholder servicing costs-Note 3(b)...... 9,215
Interest-Note 2............................ 5,962
Miscellaneous.............................. 15,459
_____
Total Expenses....................... 687,480
Less-reduction in investment advisory fee due to
undertaking-Note 3(a).................. (19,166)
_____
Net Expenses......................... 668,314
_____-
INVESTMENT INCOME-NET....................................................... 292,261
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $4,325,349
Net unrealized appreciation (depreciation) on investments 7,720,782
_____
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 12,046,131
_____-
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $12,338,392
======
See notes to financial statements.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
________- ________-
OPERATIONS:
Investment income-net.......................................... $ 292,261 $ 129,313
Net realized gain (loss) on investments........................ 4,325,349 1,186,985
Net unrealized appreciation (depreciation) on investments...... 7,720,782 3,840,201
______ ______
Net Increase (Decrease) in Net Assets Resulting
from Operations............................................ 12,338,392 5,156,499
______ ______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net.......................................... (251,529) (140,970)
Net realized gain on investments............................... (4,505,355) (722,469)
______ ______
Total Dividends.............................................. (4,756,884) (863,439)
______ ______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.................................. 136,594,495 19,961,838
Dividends reinvested........................................... 4,756,884 863,439
Cost of shares redeemed........................................ (66,020,126) (3,867,386)
______ ______
Increase (Decrease) in Net Assets from Capital Stock Transactions 75,331,253 16,957,891
______ ______
Total Increase (Decrease) in Net Assets.................... 82,912,761 21,250,951
NET ASSETS:
Beginning of Period............................................ 31,657,232 10,406,281
______ ______
End of Period.................................................. $114,569,993 $ 31,657,232
====== ======
UNDISTRIBUTED INVESTMENT INCOME-NET.............................. $ 42,432 $ 1,700
______ ______
Shares Shares
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................... 7,039,912 1,237,706
Shares issued for dividends reinvested......................... 233,664 50,113
Shares redeemed................................................ (3,398,612) (245,303)
______ ______
Net Increase (Decrease) in Shares Outstanding................ 3,874,964 1,042,516
====== ======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Year Ended December 31,
____________________________________________
PER SHARE DATA: 1996 1995 1994 1993(1)
___ ___ ___ ___
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $17.31 $13.23 $13.38 $12.50
___ ___ ___ ___
Investment Operations:
Investment income-net.................................. .05 .08 .35 .04
Net realized and unrealized gain (loss)
on investments....................................... 3.63 4.49 (.15) .88
___ ___ ___ ___
Total from Investment Operations....................... 3.68 4.57 .20 .92
___ ___ ___ ___
Distributions:
Dividends from investment income-net................... (.05) (.08) (.35) (.04)
Dividends from net realized gain on investments........ (.85) (.41) .- .-
___ ___ ___ ___
Total Distributions.................................... (.90) (.49) (.35) (.04)
___ ___ ___ ___
Net asset value, end of period......................... $20.09 $17.31 $13.23 $13.38
=== === === ===
TOTAL INVESTMENT RETURN.................................... 21.23% 34.56% 1.49% 7.35%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets...... .95% 1.27% .25% .06%(2)
Ratio of interest expense to average net assets........ .01% .- .- .-
Ratio of net investment income
to average net assets................................ .42% .70% 4.58% .64%(2)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus and sub-investment adviser .03% .06% 2.60% 6.19%(2)
Portfolio Turnover Rate................................ 126.41% 88.52% 373.68% .-
Average commission rate paid (3)....................... $.0578 - - -
Net Assets, end of period (000's Omitted).............. $114,570 $31,657 $10,406 $1,372
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
(3) For fiscal years beginning January 1, 1996, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
See notes to financial statements.
</TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus Socially Responsible Growth Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a diversified
open-end management investment company. The Fund's investment objective is to
provide capital growth through equity investments in companies that 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. 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. Dreyfus is a direct subsi
diary of Mellon Bank, N.A. ("Mellon"). NCM Capital Management Group, Inc.
("NCM") serves as the Fund's sub-investment adviser. Premier Mutual Fund
Services, Inc. acts as the distributor of the Fund's shares, which are sold
without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(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.
(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. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. At December 31, 1996, there were no outstanding
borrowings.
The average daily amount of borrowings outstanding during the period
ended December 31, 1996 was approximately $99,000, with related a weighted
average annualized interest rate of 5.99%. The maximum amount borrowed at any
time during the period ended December 31, 1996 was $3,800,000.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT
IONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory Agreement ("Agreement") with
Dreyfus, the investment advisory fee is computed at the annual rate of .75 of
1% of the value of the Fund's average daily net assets and is payable
monthly. Dreyfus has undertaken from January 1, 1996 through December 31,
1996 to reduce the investment advisory fee paid by the Fund, to the extent
that the Fund's aggregate expenses (exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses) exceed an annual rate of 1% of the
value of the Fund's average daily net assets. The reduction in investment
advisory fee, pursuant to the undertaking, amounted to $19,166 during the
period ended December 31, 1996.
Pursuant to a Sub-Investment Advisory Agreement with NCM, the
sub-investment advisory fees are payable monthly by Dreyfus, and are based
upon the value of the Fund's average daily net assets, computed at the
following annual rates:
<TABLE>
<CAPTION>
Average Net Assets
_________
<S> <C>
0 to $32 million................................................................... .10 of 1%
In excess of $32 million to $150 million........................................... .15 of 1%
In excess of $150 million to $300 million.......................................... .20 of 1%
In excess of $300 million.......................................................... .25 of 1%
</TABLE>
Prior to April 22, 1996, the sub-investment advisory fee was computed at an
annual rate of .10 of 1% on the first $500
million and .20 of 1% on the excess over $500 million of the value of the
Fund's average daily net assets and was payable by Dreyfus.
(B) Pursuant to the Fund's Shareholder Services Plan, 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 Fund's average
daily net assets for certain allocated expenses with respect to servicing
and/or maintaining shareholder accounts. During the period ended December 31,
1996, the Fund was charged an aggregate of $5,531 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $160 during the period ended December 31, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period ended
December 31, 1996, $9,190 was paid to Mellon pursuant to the custody
agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $146,562,928 and $82,272,518, respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was 11,443,400, consisting of $12,269,295 gross unrealized
appreciation and $825,895 gross unrealized depreciation.
At December 31, 1996, 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, 1996, 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 verification by
examination of securities held by the custodian as of December 31, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. 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, 1996, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[ERNST & YOUNG LLP signature logo]
New York, New York
January 29, 1997
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.1996 per share as a
long-term capital gain distribution of the $.791 per share paid on December
26, 1996. The Fund also designates $.010 per share as a long-term capital
gain distribution of the $.110 per share paid on September 16, 1996.
[Dreyfus lion "d" logo]
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
NCM Capital Management Group, Inc.
103 West Main Street
Durham, NC 27705
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 111AR9612
[Dreyfus logo]
Socially Responsible
Growth Fund, Inc.
Annual Report
December 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX
EXHIBIT A:
STANDARD DREYFUS
& POOR'S 500 SOCIALLY
PERIOD COMPOSITE STOCK RESPONSIBLE
PRICE INDEX* GROWTH FUND
10/7/93 10,000 10,000
12/31/93 10,232 10,735
12/31/94 10,366 10,895
12/31/95 14,257 14,661
12/31/96 17,528 17,774
*Source: Lipper Analytical Services, Inc.
