THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this semi-annual report for The Dreyfus
Socially Responsible Growth Fund, Inc. for the six-month period ended June 30,
1998. Over this period, your Fund produced a total return of 18.38%,* which
compares with a total return of 17.72% for the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500 Index") and 14.16% for the Dow Jones Industrial
Average.**
The market environment during the six-month period ended June 30, 1998 was
ideal for investors. With a strong economy, little threat of higher inflation,
low interest rates and stronger consumer confidence, equity investors continued
to plow money into the market. The result was another profitable six months for
investors.
During the period, our strategy of buying reasonably priced growth stocks with
consistent earnings paid off as investors decided that large, liquid and stable
growing companies were the best stocks to own in an uncertain global market.
While there were some earnings disappointments due to slowing demand in Asia,
investors frequently overlooked these shortfalls and appeared to focus on the
prospects of improved earnings over the long term.
ECONOMIC REVIEW
Fears of Federal Reserve Board tightening appear to have eased due to
accumulating evidence of slower overall economic growth since the spring.
Monetary tightening has been deterred by the Asian financial crisis. The Fed's
main domestic concern is that the tight labor market has begun to fuel faster
wage growth across many industries. Thus far, rising wages have still not meant
rising prices. Instead, this cost-price mix threatens to further erode corporate
profit margins. Market interest rates have already reflected the slower economy,
and the interest rate curve has become quite flat.
The shift to slower economic growth this spring is largely due to the drag
from Asia's recession, but may well be reinforced this summer by the multiplier
impacts of the General Motors strike. Among broader economic factors, the trade
deficit has widened sharply due to both weak exports and strong growth in
imports. Also, inventories soared earlier this year, potentially creating some
drag on future production. However, slowing industrial output has largely been
met by shortening the manufacturing work week, not by cutting jobs. Hence, the
shift to slower growth has not relieved the tightness in the labor market.
Instead, the virtual absence of bad news has left consumers to enjoy the
benefits of rising real wages and low interest rates that, in turn, have boosted
spending and home ownership.
Although growth in corporate profits has slowed in many sectors in the past
year, consensus estimates of future profit growth continue to be cut by many
analysts. Profit margins had already begun to shrink under the weight of rising
labor costs, making companies' reported profits increasingly dependent on sales
growth. Overall profits could thus prove quite vulnerable to a period of
significantly slower economic growth.
Virtually all Treasury market interest rates have already fallen near to the
floor set by the Federal Funds rate. This implies to us that further substantial
interest rate drops are unlikely unless the economy weakens enough to justify
action by the Fed to ease credit.
MARKET OVERVIEW
Measured broadly, the half-year ended June 30, 1998 was another period of
solid advance for the stock market. Yet that general statement did not apply to
all categories of stocks.
To be sure, the S&P 500 Index achieved a new record of 17.72% at the end of
the six-month period. The Dow Jones Industrial Average (DJIA), while it didn't
reach its all-time record, nonetheless gained 14.16% for the six months, closing
the half-year above 9000. Small and medium size stocks, however, underperformed
the large cap issues. The Standard & Poor's MidCap 400 Index gained just 8.63%
for the half-year, and the Russell 2000 Index of small cap issues advanced a
mere 4.93%.
The first calendar quarter provided most of the strength for the six months,
particularly among the large cap companies. In the April-June quarter, the S&P
500 Index gained 3.32% and the DJIA 2.15%, while the Russell 2000 actually
dropped by 4.66%.
Stock categories that were strongest during the half-year included financials,
particularly banks, brokerages, insurance and diversified financial services;
technology, especially communications and computer issues; and cyclical consumer
stocks such as advertising, airlines, automotive, broadcasting and home
construction.
The weak categories for the period included precious metals, oil drilling and
oilfield suppliers, and some industrial issues.
Corporate profits dropped sharply from the strong pace of last year. According
to the statistical service First Call, profits for stocks in the S&P 500 Index
were expected to show a rise of just 2.3% for the second quarter, compared to
3.8% in the first quarter. Of course, there were optimists forecasting a hefty
rise in profits for later this year and early 1999, which could potentially
propel stock prices upward.
As expected, the Fed at their last meeting made no change in interest rates,
even though inflationary pressures are a constant worry for the Fed. The reason
for their inaction may well have been the precarious state of some economies
elsewhere in the world and the desire not to precipitate a major correction in
the U.S. stock market. Even so, the Fed thought it timely to issue a stern
warning to banks not to become over-extended with unwise loans, as they did in
the 1980s.
Despite the Fed' s warning and the extremely high historical level of stock
prices in relation to earnings and cash flow, investors still appeared eager to
own equities. Moreover, surveys of consumer sentiment continued to show that the
average consumer was more confident about the future than has been the case in a
generation.
PORTFOLIO FOCUS
The Fund outperformed the S& P 500 Index by 0.66% during the review period
largely because of strong performance by the consumer cyclical, health care and
technology sectors. The technology sector, which had underperformed the market
in late 1997, bounced back strongly to produce a return of 30.8% for the
six-month period ended June 30, 1998. The strong performance of the technology
sector (which had a weight of approximately 22% in the Fund's portfolio versus
the S& P 500 Index' s technology sector weight of 14% as of June 30, 1998),
coupled with our stock selection, helped the overall portfolio performance. The
computer software stocks, in particular Computer Associates International,
Microsoft and BMC Software, performed well, but computer hardware maker Compaq
Computer performed poorly because of skepticism about the acquisition of Digital
Equipment and high inventory levels.
Good stock selection and being overweighted in the health care sector
contributed positively to the Fund's performance. Boston Scientific was up 55%.
Schering Plough gained 27%, riding the wave of a strong product cycle and strong
sales of its allergy drug Claritin. The world's largest pharmaceutical company,
Merck & Co., gained 27% as investors sought to put money in stocks with a lower
risk profile.
The Fund' s performance was also helped by its overweighting in the consumer
cyclical sector, which was the second best performing sector in the S&P 500
Index for the period. This sector benefited from investors seeking companies
with large domestic operations. With unemployment low and personal income levels
high, companies that benefit from consumer spending performed very well during
the period. Two of the Fund's holdings, Home Depot and Wal-Mart Stores, were up
strongly because of vigorous growth in their domestic business.
Over the previous two years, our decision to overweight the consumer staples
and financial sectors helped the portfolio to gain strong performance relative
to the market. Because of the negative effects of the Asia crisis, however,
which was manifested through a stronger dollar and a flattened yield curve, that
strategy did not work well during the period under review.
In the fourth quarter of 1997, the financial sector exhibited weakness because
of fears that the Fed would raise interest rates to contain the economy's torrid
growth pace. The sector did not experience an appreciable improvement in
performance during the first half of the year despite the improvement in the
outlook for the Asian economies. Despite the underperformance, there were some
bright spots in the portfolio because of increased merger activities in the
banking industry. Three of the portfolio's holdings, BankAmerica, Citicorp, and
Ahmanson (H.F.) & Co., which were involved in merger activities, saw their
stocks perform well. BankAmerica was up 19.54%, Citicorp rose 19.08%, while
Ahmanson gained 18.68%.
In the consumer staples sector, Gillette underperformed the market by 4% while
Procter & Gamble was up only 14.80% versus 17.70% for the S&P 500 Index for the
reporting period.
The weakest performing S& P 500 Index sectors for the period were the
transportation and energy groups, which were underweighted in the portfolio.
Seitel and Schlumberger were two stocks in the portfolio's energy sector that
performed poorly over the period. Both stocks declined in a rising market
environment because of weak oil prices.
MARKET OUTLOOK
We believe the market has been able to sustain a high valuation in the current
environment because of the favorable economic picture in the U.S. While we do
not see any real problems on the horizon that will precipitate a severe market
decline, we are concerned about the unrealistic expectations built into the
market by investors. In the six months ended June 30, 1998, the market
appreciated by more than what most strategists predicted for the entire year.
We believe the market will experience increased volatility but trade in a
narrow band for the rest of the year. Given our cautious outlook on the market
for the near term, we currently intend to continue to emphasize high quality
stocks in the portfolio. As stocks reach our price objective, we generally will
replace them with stocks that offer greater potential for appreciation. By
staying true to our discipline and process, we have to add value to the
portfolio over the long term.
SOCIAL INVESTMENT REVIEW
Social screening is a challenging process requiring the use of a wide variety
of research tools and methodologies. Fund management employs a disciplined
investigative process to ensure that the Fund continues to purchase and hold
only companies that conduct their business in a manner that contributes to the
enhancement of the quality of life in America. We not only speak with companies,
but scrutinize information from respected social investment research providers
like the Council on Economic Priorities, Kinder Lydenberg and Domini, and
Environmental Information Services. Government databases, on-line media searches
and the Internet help to provide insight into a company' s behavior and
reputation, as do discussions with community and watchdog organizations.
Thank you for your confidence in Dreyfus. It is a privilege to serve your
investment needs.
Sincerely,
[Maceo K. Sloan,signature logo] [Eric Steedman, signature log0]
Portfolio Manager Portfolio Manager
NCM Capital Management Group, Inc. The Dreyfus Corporation
July 16, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
The Fund's performance does not reflect the deduction of additional charges and
expenses imposed in connection with investing in variable insurance contracts,
which will reduce returns.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC.--Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. Both the
Standard & Poor' s 500 Composite Stock Price Index and the Dow Jones Industrial
Average are widely accepted unmanaged indices of U.S. stock market performance.
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
Common Stocks--90.2% Shares Value
- -------------------------------------------------------
___________ _________
<S> <C> <C>
Commercial Services--1.7% Cognizant 105,800 $6,665,400
__________
Consumer Durables--1.9% Newell 154,000 7,671,125
__________
Consumer Non-Durables--10.8% Clorox 75,000 7,153,125
Coca-Cola 85,500 7,310,250
Gillette 107,800 6,110,913
Hershey Foods 46,800 3,229,200
Jones Apparel Group (a) 151,000 5,520,938
PepsiCo 173,000 7,125,438
Procter & Gamble 70,400 6,410,800
__________
42,860,664
__________
Consumer Services--3.4% Disney (Walt) 61,700 6,482,356
New York Times, Cl. A 40,200 3,185,850
Service Corp. International 93,100 3,991,663
__________
13,659,869
__________
Electronic Technology--10.7% Applied Materials (a) 192,000 5,664,000
Cisco Systems (a) 72,400 6,665,325
Compaq Computer 226,900 6,438,288
Ericsson (LM) Telephone, Cl. B, A.D.R. 154,400 4,419,700
Intel 33,600 2,490,600
Linear Technology 70,500 4,252,031
Sun Microsystems (a) 135,900 5,903,156
Tellabs (a) 98,000 7,019,250
__________
42,852,350
__________
Finance--16.2% Ahmanson (H.F.) & Co. 49,000 3,479,000
Allstate 88,200 8,075,813
American International Group 46,400 6,774,400
BankAmerica 75,600 6,534,675
BANKBOSTON 81,200 4,516,750
Citicorp 20,300 3,029,775
Conseco 127,100 5,941,925
Federal National Mortgage Association 118,700 7,211,025
Nationwide Financial Services, Cl. A 90,200 4,600,200
Summit Bancorp 64,000 3,040,000
SunAmerica 197,200 11,326,669
__________
64,530,232
__________
Health Care--3.7% Cardinal Health 62,500 5,859,375
HBO & Co. 141,400 4,984,350
HEALTHSOUTH (a) 149,500 3,989,781
__________
14,833,506
__________
Health Technology--11.8% Bristol-Myers Squibb 85,800 9,861,638
Guidant 91,700 6,539,356
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998 (UNAUDITED)
Common Stocks (continued) Shares Value
- -------------------------------------------------------
___________ ___________
Health Technology (continued) Lilly (Eli) 71,800 $ 4,743,288
Medtronic 181,900 11,596,125
Merck & Co. 76,500 10,231,875
Schering-Plough 43,700 4,004,013
__________
46,976,295
__________
Industrial Services--1.3% Schlumberger 74,700 5,102,944
__________
Process Industries--2.5% Avery Dennison 77,500 4,165,625
Bemis 77,500 3,167,813
Fort James 58,300 2,594,350
__________
9,927,788
__________
Producer Manufacturing--5.5% EVI Weatherford (a) 100,000 3,712,500
Honeywell 79,900 6,676,644
Illinois Tool Works 93,700 6,248,619
Pitney Bowes 48,600 2,338,875
Tyco International 44,600 2,809,800
__________
21,786,438
__________
Retail Trade--6.5% Home Depot 124,500 10,341,281
OfficeMax (a) 161,300 2,661,450
Safeway (a) 180,300 7,335,956
Wal-Mart Stores 94,200 5,722,650
__________
26,061,337
__________
Technology Services--7.8% Automatic Data Processing 55,000 4,008,125
BMC Software (a) 73,400 3,812,213
Cadence Design System (a) 140,000 4,375,000
Computer Associates International 122,852 6,825,964
Microsoft (a) 38,800 4,204,950
Oracle (a) 194,000 4,765,125
Parametric Technology (a) 112,900 3,062,413
__________
31,053,790
__________
Transportation--1.2% FDX (a) 74,000 4,643,500
__________
Utilities--5.2% AES (a) 119,400 6,275,963
Ameritech 74,200 3,329,725
Bell Atlantic 104,800 4,781,500
MCI Communications 108,700 6,318,188
__________
20,705,376
__________
TOTAL COMMON STOCKS
(cost $282,644,570) $359,330,614
============
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998 (UNAUDITED)
Principal
Short-Term Investments--9.5% Amount Value
- -------------------------------------------------------
___________ _________
U.S. Treasury Bills: 4.97%, 9/10/1998 $ 1,676,000 $ 1,659,860
5.00%, 9/17/1998 17,925,000 17,735,354
4.95%, 10/1/1998 10,492,000 10,358,646
4.97%, 10/8/1998 8,251,000 8,138,209
____________
TOTAL SHORT-TERM INVESTMENTS
(cost $37,887,988) $ 37,892,069
=============
TOTAL INVESTMENTS (cost $320,532,558) 99.7% $397,222,683
======== =============
CASH AND RECEIVABLES (NET) .3% $ 1,329,218
======== =============
NET ASSETS 100.0% $398,551,901
======== =============
Notes 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 JUNE 30, 1998 (UNAUDITED)
Cost Value
_____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $320,532,558 $397,222,683
Cash 453,738
Receivable for investment securities sold 945,369
Dividends and interest receivable 218,333
Prepaid expenses 17,048
_____________
398,857,171
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 245,989
Accrued expenses 59,281
_____________
305,270
_____________
NET ASSETS $398,551,901
=============
REPRESENTED BY: Paid-in capital $298,702,057
Accumulated undistributed investment income--net 403,999
Accumulated net realized gain (loss) on investments 22,755,720
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 76,690,125
_____________
NET ASSETS $398,551,901
=============
SHARES OUTSTANDING
(150 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED) 13,485,082
NET ASSET VALUE, offering and redemption price per share $29.56
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $8,871 foreign taxes
<S> <C> <C>
withheld at source) $ 1,310,703
Interest 441,430
____________
Total Income $ 1,752,133
EXPENSES: Investment advisory fee--Note 3(a) 1,217,624
Registration fees 20,598
Professional fees 19,736
Shareholder servicing costs--Note 3(b) 19,251
Custodian fees--Note 3(b) 15,607
Prospectus and shareholders' reports 12,601
Directors' fees and expenses--Note 3(c) 6,105
Loan commitment fees--Note 2 1,120
Miscellaneous 10,011
____________
Total Expenses 1,322,653
____________
INVESTMENT INCOME--NET 429,480
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments $22,223,469
Net unrealized appreciation (depreciation) on investments 30,182,448
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 52,405,917
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $52,835,397
============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1998
Year Ended
(Unaudited) December 31, 1997
_______________ _______________
OPERATIONS:
<S> <C> <C>
Investment income--net $ 429,480 $ 893,907
Net realized gain (loss) on investments 22,223,469 7,810,679
Net unrealized appreciation (depreciation) on investments 30,182,448 35,064,277
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations 52,835,397 43,768,863
_____________ ______________
DIVIDENDS TO SHAREHOLDERS:
From investment income--net --- (936,339)
In excess of investment income--net --- (25,481)
From net realized gain on investments --- (7,501,242)
_____________ ______________
Total Dividends --- (8,463,062)
_____________ ______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold 154,153,924 210,149,862
Dividends reinvested --- 8,463,062
Cost of shares redeemed (84,324,713) (92,601,425)
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions 69,829,211 126,011,499
_____________ _____________
Total Increase (Decrease) in Net Assets 122,664,608 161,317,300
NET ASSETS:
Beginning of Period 275,887,293 114,569,993
_____________ ______________
End of Period $ 398,551,901 $ 275,887,293
============== =============
UNDISTRIBUTED INVESTMENT INCOME (DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME)--NET $ 403,999 $ (25,481)
_____________ ____________
Shares Shares
_____________ ____________
CAPITAL SHARE TRANSACTIONS:
Shares sold 5,584,635 9,000,188
Shares issued for dividends reinvested --- 339,375
Shares redeemed (3,148,020) (3,995,287)
=============== =============
Net Increase (Decrease) in Shares Outstanding 2,436,615 5,344,276
=============== =============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Six Months Ended
June 30, 1998 Year Ended December 31,
______________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993(1)
__________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.97 $20.09 $17.31 $13.23 $13.38 $12.50
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net .03 .09 .05 .08 .35 .04
Net realized and unrealized gain (loss)
on investments 4.56 5.63 3.63 4.49 (.15) .88
______ ______ ______ ______ ______ ______
Total from Investment Operations 4.59 5.72 3.68 4.57 .20 .92
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net -- (.10) (.05) (.08) (.35) (.04)
Dividends from net realized gain on investments -- (.74) (.85) (.41) .-- .--
______ ______ ______ ______ ______ ______
Total Distributions -- (.84) (.90) (.49) (.35) (.04)
______ ______ ______ ______ ______ ______
Net asset value, end of period $29.56 $24.97 $20.09 $17.31 $13.23 $13.38
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 18.38%(2) 28.44% 21.23% 34.56% 1.49% 7.35%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets .40%(2) .82% .95% 1.27% .25% .06%(2)
Ratio of interest expense and loan commitment fees
to average net assets .00%(2,3) .00%(3) .01% .-- .-- .--
Ratio of net investment income
to average net assets .13%(2) .46% .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 35.31%(2) 58.50% 126.41% 88.52% 373.68% .--
Net Assets, end of period (000's Omitted) $398,552 $275,887 $114,570 $31,657 $10,406 $1,372
- -----------------------------
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
(3) Amount represents less than .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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
subsidiary 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. is 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.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
(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. Under the terms of the custodian agreement, the Fund received net
earnings credits of $270 during the period ended June 30, 1998 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(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 $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended June
30, 1998, the Fund did not borrow under the Facility.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory 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.
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>
Average Net Assets
_________________
<S> <C> <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>
(B) Under the 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 June 30, 1998, the Fund was
charged $16,950 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. During the period
ended June 30, 1998, the Fund was charged $127 pursuant to the transfer agency
agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended June 30, 1998, the Fund was
charged $15,607 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 June 30, 1998, amounted
to $167,581,166 and $109,018,918, respectively.
At June 30, 1998, accumulated net unrealized appreciation on investments was
$76,690,125, consisting of $81,631,979 gross unrealized appreciation and
$4,941,854 gross unrealized depreciation.
At June 30, 1998, 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).
[reg.tm]
[reg.tm]
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. 111SA986
Socially Responsible
Growth Fund, Inc.
Semi-Annual
Report
June 30, 1998
