<PAGE>
Dreyfus
Socially Responsible
Growth Fund, Inc.
Annual Report
December 31, 1997
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this annual report for The Dreyfus
Socially Responsible Growth Fund, Inc. covering the fiscal year ended December
31, 1997. Over this period, your Fund produced a total return of 28.44%.* This
compares with a total return of 33.35% for the Fund's benchmark, the Standard &
Poor's 500 Composite Stock Price Index (the "S&P 500"), while the total return
for the Dow Jones Industrial Average, at 24.91%,** underperformed the Fund for
the same time period.
Economic Review
Early in the year on March 25, Alan Greenspan, Chairman of the Federal
Reserve Board (the "Fed"), made an effort to control inflation by raising the
Federal Funds rate .25% to 5.50%. The Fed's modest action sent the market into
a tailspin. However, by mid-year, with inflation apparently tame, the market
recovered and appeared to be sailing towards another record year relatively
unscathed. Halting this rosy scenario was the Iraqi standoff and the Asian
currency crisis during the second half of 1997.
The dramatic events in the global environment led to a sharp increase in
stock price volatility during the fourth quarter. The volatility in prices was
heightened by the market's high relative valuation.
Amid the turmoil in the global financial markets, the economic backdrop in the
U.S. remained calm and favorable. The economy grew at a healthy pace during the
second half of the year with very little inflation. After a strong spending
spree in late summer, U.S. consumers pulled back in September and early October,
primarily due to the weather. However, by late October and early November
spending had rebounded, giving investors confidence that GDP growth would be
healthy in the first two quarters of 1998.
Market Overview
At the beginning of 1997, there were two key issues that were highlighted as
the potential derailers of strong market performance: stock valuation and
inflation. Neither proved to be a stumbling block but continue to be issues of
concern for the market going into 1998. Valuations continue to look extreme on a
historical basis but are supported by declining bond yields. Since the March 25
Federal Funds rate hike, inflation has yet to rear its head in a significant way
and few symptoms appear on the horizon. In fact, the problems in Asia could
actually add more momentum to a potential market rarity, deflation.
Asia is a major wild card due to the lack of clarity regarding the regional
impact and the overall global effect. Many analysts have attempted to draw
unilateral relationships between companies and the region while ignoring the
domino effect. For example, a U.S. company can do business only in the U.S. but
its end products could go overseas as part of a customer's product. This makes
for a difficult task in terms of mitigating the Asia risk factor and creating a
safer portfolio.
The dollar has apparently replaced gold as the world's store of value in
times of economic uncertainty. Yet, this phenomenon has a negative impact on
U.S. companies' overseas earnings. Conversely, a stronger currency creates
investment opportunities for far-sighted U.S. firms to gain market share in
turbulent times.
Portfolio Summary
Beginning the year, the portfolio was structured to seek to capture
opportunities based on three strategic areas: financial, multinational consumer
growth, and technology companies.
Stocks that contributed to portfolio performance were heavily concentrated
in the financial services area. Names including Sunamerica, Federal National
Mortgage Association and American International Group performed well, while
Green Tree Financial was a big disappointment. Green Tree Financial had risen
to almost $50 a share when the company
<PAGE>
announced a $150 million write-off due to prepayment assumptions. The market
took this to be very negative news and drove the stock down more than 50%. Based
on the strength of the company's management, and our belief in the long term
fundamentals of the company, we took advantage of the weakness in the stock to
add to the existing position in the Fund.
Multinational consumer growth companies were the first to be affected by what
the market has termed the "Asian Flu." Avon Products was a company that
symbolized how the market reacted to many firms that had such exposure. The
stock traded as high as 76 11/16 and as low as 56 1/16. Gillette is another
holding with major multinational consumer exposure which delivered lower than
market returns.
The Fund's technology holdings held up well but did not perform as expected
relative to the market. Concerns regarding a slowing domestic economy as well as
the broader impact from Asia cut deep into price performance as investors
grappled with the short to intermediate-term issues. Key holdings continue to be
Cisco Systems, Microsoft and BMC Software.
Another area that provided a significant positive contribution was energy,
particularly the energy service companies. Three of the stocks owned by the Fund
during the year were EVI, Global Marine and Schlumberger. While not a direct
play on oil prices, the firms gave exposure to the equipment and service
providers that make possible the exploration and production of oil.
Portfolio Review
During the fourth quarter, the portfolio was repositioned to reduce our
weighting in Technology while increasing our weighting in Communication
Services, Consumer Staples, and Health Care. While we still believe in the
strong secular growth in technology, we are concerned about the short-term
impact of the Asian crisis on the earnings of technology companies.
Most recently, we sold Chase Manhattan and Federal Express. While these are
outstanding companies, the market appears to have fully reflected this in their
current market price.
We have added companies that continue to have solid fundamentals at what we
perceive to be reasonable prices. We bought Procter & Gamble, Coca-Cola,
Ameritech and Automatic Data Processing.
Social Goals
Although all our portfolio companies meet our social responsibility screens,
a number are of special note. For example, Bemis, a major manufacturer of
packaging and labels, is a long-term holding of the Fund, and not the sort of
company that one immediately thinks of as socially responsible. However, Bemis
helps to contribute to the quality of life in America in a number of ways. By
researching the move toward using plastic flex-pack for shipping household paper
products, Bemis hopes to eliminate the need for cardboard boxes, which would
involve a big cost savings for both suppliers and supermarkets that must
compact, bundle and recycle the cardboard. The plastic resins Bemis uses contain
a minimum 25% recycled materials, and all of its facilities are set up for scrap
recovery. Bemis claims plant waste-minimization is a big priority. The company
also has a history of positive labor relations, back to the time when the Bemis
family welcomed unions into its plants in the 1920s. Bemis has been a presence
in many of the communities in which it operates for over 75 years.
A more recently acquired holding of the Fund is AES. AES is the world's
largest global power company, owning or having interest in 82 power plants in 12
countries, including six in the U.S. The company has an excellent environmental
record both here and abroad, and has a stated commitment to earning profits
while adhering to a very strong set of socially responsible values. As domestic
electrical utility deregulation expands, the Fund will continue to look at the
Utilities sector in an attempt to identify companies, like AES, which provide
America with clean, affordable and profitable electric power.
<PAGE>
We thank you for allowing us to manage assets on you behalf. You may be
assured that we will continue our best efforts to bring you rewarding returns
within a socially responsible context.
Sincerely,
Maceo K. Sloan Eric Steedman
Portfolio Manager Portfolio Manager
NCM Capital Management Group, Inc. The Dreyfus Corporation
January 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.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc. December 31, 1997
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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
Dollars [GRAPH]
$23,374
Standard & Poor's
500 Composite Stock
Price Index*
$22,827
The Dreyfus Socially
Responsible Growth
Fund, Inc.
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- -------------------------------------------------------------------------------
One Year Ended From Inception (10/7/93)
December 31, 1997 to December 31, 1997
-------------------- ------------------------
28.44% 21.49%
- -----------------
Past performance is not predictive of future performance.
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.
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.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
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Statement of Investments December 31, 1997
<TABLE>
<CAPTION>
Common Stocks--90.0% Shares Value
- ------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
Capital Equipment--1.9% Illinois Tool Works........................... 87,300 $ 5,248,912
------------
Communications Equipment--1.8% Tellabs....................................(a) 91,300 4,827,487
------------
Computer Services--1.1% Automatic Data Processing..................... 51,300 3,148,537
------------
Construction--1.9% AES........................................(a) 111,300 5,189,362
------------
Consumer Non-Durables--13.3% Avon Products................................. 43,700 2,682,087
CPC International............................. 28,900 3,113,975
Clorox........................................ 84,900 6,712,406
Coca-Cola..................................... 81,200 5,409,950
Colgate-Palmolive............................. 108,000 7,938,000
Gillette...................................... 52,200 5,242,837
Interstate Bakeries........................... 69,400 2,593,825
Jones Apparel Group........................(a) 70,300 3,022,900
------------
36,715,980
------------
Consumer Services--1.8% BET Holdings, Cl. A........................(a) 30,700 1,676,987
Service Corp. International................... 86,700 3,202,481
------------
4,879,468
------------
Consumer Staples--1.9% Procter & Gamble.............................. 65,900 5,259,643
------------
Electronic Technology--8.8% Cisco Systems..............................(a) 136,050 7,584,787
EMC........................................(a) 113,400 3,111,412
Intel......................................... 44,400 3,119,100
Linear Technology............................. 65,600 3,780,200
Sun Microsystems...........................(a) 95,300 3,800,087
3COM.......................................(a) 79,300 2,770,543
------------
24,166,129
------------
Finance--20.7% Allstate...................................... 82,200 7,469,925
American International Group.................. 43,200 4,698,000
BANKBOSTON.................................... 65,600 6,162,300
BankAmerica................................... 70,400 5,139,200
Citicorp...................................... 37,800 4,779,337
Federal National Mortgage Association......... 158,400 9,038,700
Green Tree Financial.......................... 141,500 3,705,531
Hartford Life, Cl. A.......................... 72,300 3,276,093
Nationwide Financial Services, Cl. A.......... 84,000 3,034,500
Summit Bancorp................................ 59,600 3,173,700
SunAmerica.................................... 156,300 6,681,825
------------
57,159,111
------------
</TABLE>
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
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Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
Health Care--2.1% HBO & Co...................................... 65,900 $ 3,163,200
HEALTHSOUTH................................(a) 98,200 2,725,050
------------
5,888,250
------------
Health Technology--12.6% Boston Scientific..........................(a) 84,900 3,894,787
Bristol-Myers Squibb.......................... 79,900 7,560,537
Guidant....................................... 112,000 6,972,000
Medtronic..................................... 169,400 8,861,750
Merck & Co.................................... 71,300 7,575,625
------------
34,864,699
------------
Industrial Services--3.5% Global Marine..............................(a) 77,200 1,891,400
Schlumberger.................................. 94,300 7,591,150
Seitel.....................................(a) 13,600 232,900
------------
9,715,450
------------
Process Industries--3.1% Avery Dennison................................ 72,200 3,230,950
Bemis......................................... 72,200 3,181,312
Fort James.................................... 54,200 2,073,150
------------
8,485,412
------------
Producer Manufacturing--1.0% Dover......................................... 75,200 2,716,600
------------
Publishing-newspapers--.6% New York Times, Cl. A......................... 25,800 1,706,025
------------
Retail--1.9% Home Depot.................................... 88,300 5,198,662
------------
Retail Trade--2.4% Consolidated Stores........................(a) 68,100 2,992,143
OfficeMax..................................(a) 261,000 3,719,250
------------
6,711,393
------------
Technology Services--7.4% BMC Software...............................(a) 107,300 7,041,562
Computer Associates International............. 109,100 5,768,662
Microsoft..................................(a) 32,500 4,200,625
Oracle.....................................(a) 150,700 3,362,494
------------
20,373,343
------------
Utilities--2.2% Ameritech..................................... 39,600 3,187,800
MCI Communications.........................(a) 34,800 1,489,875
WorldCom...................................(a) 47,600 1,439,900
------------
6,117,575
------------
TOTAL COMMON STOCKS
(cost $201,863,051)......................... $248,372,038
============
</TABLE>
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
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Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Short-Term Instruments--9.8% Amount Value
- ------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
U.S. Treasury Bills: 4.91%, 1/8/1998............................... $ 74,000 $ 73,949
4.91%, 1/15/1998.............................. 344,000 343,401
5.12%, 1/22/1998.............................. 14,039,000 13,997,725
5.18%, 2/5/1998............................... 183,000 182,105
5.25%, 2/26/1998.............................. 363,000 360,194
5.19%, 3/5/1998............................... 1,009,000 999,909
5.31%, 3/12/1998.............................. 661,000 654,410
5.16%, 3/19/1998.............................. 172,000 170,100
5.11%, 4/2/1998............................... 10,436,000 10,298,662
------------
TOTAL SHORT-TERM INSTRUMENTS
(cost $27,081,765).......................... $ 27,080,455
============
TOTAL INVESTMENTS (cost $228,944,816).......................................... 99.8% $275,452,493
======= ============
CASH AND RECEIVABLES (NET)..................................................... .2% $ 434,800
======= ============
NET ASSETS..................................................................... 100.0% $275,887,293
======= ============
<FN>
Notes to Statement of Investments:
- ------------------------------------------------------------------------------
(a) Non-income producing.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments................................... $228,944,816 $275,452,493
Cash............................................. 528,090
Dividends receivable............................. 146,590
Prepaid expenses................................. 11,308
------------
276,138,481
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 168,605
Accrued expenses................................. 82,583
------------
251,188
------------
NET ASSETS..................................................................... $275,887,293
============
REPRESENTED BY: Paid-in capital.................................. $228,872,846
Accumulated distributions in excess of investment
income--net..................................... (25,481)
Accumulated net realized gain (loss) on investments 532,251
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4.......................... 46,507,677
------------
NET ASSETS..................................................................... $275,887,293
============
SHARES OUTSTANDING
(150 million shares of $.001 par value Common Stock authorized)................ 11,048,467
NET ASSET VALUE, offering and redemption price per share....................... $24.97
======
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1997
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends............................. $ 1,682,549
Interest................................... 802,338
------------
Total Income.......................... $ 2,484,887
EXPENSES: Investment advisory fee--Note 3(a).......... 1,447,157
Professional fees.......................... 51,358
Registration fees.......................... 37,178
Custodian fees--Note 3(b)................... 14,830
Shareholder servicing costs--Note 3(b)...... 12,974
Directors' fees and expenses--Note 3(c)..... 11,170
Prospectus and shareholders' reports....... 4,353
Loan commitment fees--Note 2................ 1,337
Miscellaneous.............................. 10,623
------------
Total Expenses........................ 1,590,980
-----------
INVESTMENT INCOME--NET.................................................... 893,907
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments.... $ 7,810,679
Net unrealized appreciation (depreciation)
on investments........................... 35,064,277
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 42,874,956
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $43,768,863
===========
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................... $ 893,907 $ 292,261
Net realized gain (loss) on investments................................. 7,810,679 4,325,349
Net unrealized appreciation (depreciation) on investments............... 35,064,277 7,720,782
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 43,768,863 12,338,392
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net.............................................. (936,339) (251,529)
In excess of investment income--net...................................... (25,481) --
From net realized gain on investments................................... (7,501,242) (4,505,355)
------------ ------------
Total Dividends................................................... (8,463,062) (4,756,884)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 210,149,862 136,594,495
Dividends reinvested.................................................... 8,463,062 4,756,884
Cost of shares redeemed................................................. (92,601,425) (66,020,126)
------------ ------------
Increase (Decrease) in Net Assets from Capital Stock Transactions. 126,011,499 75,331,253
------------ ------------
Total Increase (Decrease) in Net Assets........................ 161,317,300 82,912,761
NET ASSETS:
Beginning of Period..................................................... 114,569,993 31,657,232
------------ ------------
End of Period........................................................... $275,887,293 $114,569,993
============ ============
Undistributed investment income (Distributions in excess of investment
income)--net............................................................ $ (25,481) $ 42,432
------------ ------------
<CAPTION>
Shares Shares
------------ ------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 9,000,188 7,039,912
Shares issued for dividends reinvested.................................. 339,375 233,664
Shares redeemed......................................................... (3,995,287) (3,398,612)
------------ ------------
Net Increase (Decrease) in Shares Outstanding..................... 5,344,276 3,874,964
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993(1)
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $20.09 $17.31 $13.23 $13.38 $12.50
------ ------ ------ ------ ------
Investment Operations:
Investment income--net................................... .09 .05 .08 .35 .04
Net realized and unrealized gain (loss) on investments.. 5.63 3.63 4.49 (.15) .88
------ ------ ------ ------ ------
Total from Investment Operations..................... 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......................... $24.97 $20.09 $17.31 $13.23 $13.38
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.................................... 28.44% 21.23% 34.56% 1.49% 7.35%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets....... .82% .95% 1.27% .25% .06%(2)
Ratio of interest expense and loan commitment fees
to average net assets................................ .00%(3) .01% -- -- --
Ratio of net investment income to average net assets.... .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................................. 58.50% 126.41% 88.52% 373.68% --
Average commission rate paid(4)......................... $.0596 $.0578 -- -- --
Net Assets, end of period (000's Omitted)............... $275,887 $114,570 $31,657 $10,406 $1,372
<FN>
- ---------------
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
(3) Amount represents less than .01%.
(4) 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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
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
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.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. This may result in distributions that
are in excess of investment income-net on a fiscal year basis. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income 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
December 31, 1997, the Fund did not borrow under the Facility.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (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:
Average Net Assets
------------------
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%
(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 December 31, 1997, the Fund was
charged $12,974 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 December 31, 1997, the Fund was charged $185 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended December 31, 1997, the Fund was
charged $14,830 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, 1997,
amounted to $202,055,499 and $102,600,323, respectively.
At December 31, 1997, accumulated net unrealized appreciation on investments
was $46,507,677, consisting of $51,246,822 gross unrealized appreciation and
$4,739,145 gross unrealized depreciation.
At December 31, 1997, 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).
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
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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, 1997, 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 and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of December 31, 1997 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, 1997, 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
New York, New York
January 30, 1998
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
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Important Tax Information (Unaudited)
For Federal tax purposes the Fund hereby designates $.190 per share as a
long-term capital gain distribution (of which 55.26% is subject to the 20%
maximum Federal tax rate) of the $.780 per share paid on December 30, 1997. The
Fund also designates $.040 per share as a long-term capital gain distribution of
the $.050 per share paid on September 9, 1997.
Additionally, the Fund designates 26.25% of the ordinary dividends paid
during the fiscal year ended December 31, 1997 as qualifying for the corporate
dividends received deduction.
<PAGE>
[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. 111AR9712
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
& POOR'S 500 THE DREYFUS
PERIOD COMPOSITE STOCK SOCIALLY RESPONSIBLE
PRICE INDEX* GROWTH FUND, INC.
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
12/31/97 23,374 22,827
*Source: Lipper Analytical Services, Inc.
