YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund' s other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Investor:
It is my pleasure to introduce Paul A. Hilton, who recently became the primary
portfolio manager of The Dreyfus Socially Responsible Growth Fund, Inc. with
respect to its areas of social concern.
Prior to joining Dreyfus, Paul Hilton was a research analyst in the Social
Awareness Investment program at Smith Barney Asset Management, a division of
Travelers Group. He also had similar responsibilities at the Council for
Economic Priorities, a New York-based not-for-profit organization best known for
its consumer guide "Shopping for a Better World."
Paul holds a BA in public affairs from Syracuse University and an MA in
cultural anthropology from New York University. We believe that Paul is
eminently qualified to help The Dreyfus Socially Responsible Growth Fund live up
to its charter in the areas of social responsibility.
Sincerely,
[Stephen E. Canter signature]
Stephen E. Canter
President
The Dreyfus Corporation
January 15, 1998
New York, N.Y.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are pleased to provide you with this annual report for The Dreyfus Socially
Responsible Growth Fund, Inc. for the 12-month period ended December 31, 1998.
Over this period, your Fund produced a total return of 29.38%,* which compares
with a total return of 28.60% for the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500") and 18.15% for the Dow Jones Industrial Average.*
The 12-month period was indeed an unsettling one for investors as market
sentiment gyrated wildly from extreme bullishness to extreme bearishness. The
most dramatic shift in sentiment occurred in August when the S&P 500 dropped
14.45% . The panic in the stock market was widespread and no sector escaped
unscathed. Small capitalization stocks, however, declined the most. Although the
Fund' s performance also suffered in August, our strategy of investing in
reasonably priced, large and liquid growth stocks with consistent earnings
helped to protect the Fund from a more severe decline during the month. By the
end of November, the Fund' s year-to-date performance was solidly back into
positive territory following an impressive recovery in the stock market in
October and November after the Federal Reserve Board (Fed) cut interest rates.
ECONOMIC REVIEW
During 1998, the main regions of the world had very different economic
fundamentals. The U.S. began the period with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve to contemplate a rise in interest rates early in the year.
The U.S. economy cooled enough over the months that the Fed decided to stand
pat. Evidence of economic cooling continued to accumulate and worries about the
world economy intensified. Financial stresses pushed the Fed to ease beginning
in September. After many years of subpar economic growth, continental Europe
moved into a sustained economic expansion. The overall European economy
benefited as interest rates in peripheral countries such as Spain and Italy
fell, approaching the lower levels established by Germany, on the eve of
currency unification. Unlike the U.S., Europe has substantial excess capacity of
productive plants and labor. In Asia, weak economies were pervasive as a result
of the Asian financial crisis. The Latin American economies weakened as the
financial stresses spread throughout that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The drop
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in real income, a strong labor market and
increases in the prices of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of the industrial weakness was to cool off a U.S.
economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for commodity
exporting countries throughout the world. The effect on Europe and the U.S. has
been to lower expectations of profit growth and drive down bond yields. Monetary
policy has begun to ease in both the U.S. and Europe.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management hedge fund
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. There appears to be a shift in the priorities of key policymakers from
fighting potential inflation to restimulating world economic growth.
MARKET OVERVIEW
The 12 months ended December 31, 1998 encompassed some very different market
phases. There was stock market strength during the early part of the period.
Small-cap indices had already started to erode and were joined by large-cap
indices by midsummer. A sharp decline until the end of August was followed by a
rebound and then a renewed decline amid financial fears until early October. In
the last two months there was a strong rally in response to the easing of
monetary policy. Returns on mid-cap and small-cap stock indices tended to be
weaker than for large caps, with a negative total return on small-cap indices.
Three key developments influenced stock market behavior during the fiscal
period. First, the Federal Reserve continued to keep the Federal Funds rate flat
at 5.5% until late September, but then began a succession of easing moves.
Second, weakness in emerging country economies contributed to declining
commodity prices and a drop in long-term Treasury bond yields to multi-decade
lows. Third, expectations for corporate profits dropped, first in the sectors
sensitive to Asian developments and then for a broader list of stocks.
The trigger for the sharp decline in stocks in August appeared to be the
Russian default in the summer of 1998. This resulted in deepening concerns about
weaker economic growth and corporate profits. There was also a global margin
call on risky assets held by hedge funds and financial institutions. This raised
the cost of debt financing for many corporations and many emerging countries.
Expectations for economic activity in emerging countries in Asia and Latin
America shifted down sharply while expectations for U.S. corporate profits
weakened somewhat. Despite the fall in Treasury bond yields, financial stocks
led the summer selloff due to concerns about financial contagion among emerging
countries and potential loan losses by financial institutions. However, in the
last two months of the fiscal period, these fears began to ebb in response to
Federal Reserve easing moves.
The erosion of expectations about corporate profit growth over the last year
contributed to an outperformance by a small group of super-cap growth stocks for
much of the fiscal year. Investors had more confidence in the prospect for
strong persistent earnings growth for this small group of stocks than for the
broad market. Value stocks, which often have greater cyclical sensitivity to
earnings fluctuations, lagged behind these super-growth stocks. In addition,
many of the financial stocks that fall into the value category dropped sharply
following the Russian default and global margin call concerns, before rebounding
after the Fed acted.
PORTFOLIO FOCUS
Our sector allocation during the volatile 12-month reporting period was an
important strategy for the Fund. As a result of the global economic problems, we
initiated defensive strategies in the third quarter to protect the portfolio.
The most important strategy was reducing our exposure in sectors that we
believed exhibited the highest sensitivity to a slowing world economy.
Accordingly, the Energy sector allocation was reduced because of weak oil prices
due to excess supply and OPEC's inability to enforce production quotas on its
members. The Capital Goods sector was underweighted because of our expectation
that capital expenditure for industrial goods would slow. A number of the Fund's
holdings including Honeywell, EVI Weatherford, Fort James and Schlumberger were
eliminated from the portfolio to accomplish our goals of reducing exposure to
economy and commodity sensitive sectors.
The sectors that were the biggest contributors to the portfolio's positive
performance were Communication Services, Consumer Staples and Health Care. The
Technology group also performed well, particularly during the last three months
of the reporting period. Some of the best performing stocks held by the Fund
during the year were Sun Microsystems up 114%, Cisco Systems up 150%, Guidant up
70% and Safeway up 78%.
Our biggest mistake during the year was overweighting the financial sector
compared to the S&P 500 and poor stock selection in the group. The hardest hit
categories were the large money center banks, smaller regional banks and
specialty finance companies. Citigroup declined because of concerns about
profits in its global business and uncertainty regarding the success of merging
its Travelers and Citibank units into one seamless organization. Conseco, on the
other hand, performed poorly because of fears that a flatter yield curve in the
U.S. credit market would negatively affect the company's profitability. While
the yield curve has steepened recently, the stock has not yet recovered fully
from its depressed level. We remain positive on Conseco, for now, given the
attractive relative valuation of the stock. In response to the poor performance
of the financial stocks in the portfolio, we have added two more high quality
stocks, Marsh & McLennan Cos. and Franklin Resources, to the portfolio. We
believe the long-term prospects for these two stocks are very good because of
their exposure to the asset management business.
Our global growth strategic theme, which emphasizes large multinational
companies in the portfolio, has been a leading driver of good relative
performance in the past. However, due to what we believe to be a temporary slow
down in global economies, we have de-emphasized this strategic theme. Many large
multinational growth companies including Gillette, Disney (Walt) and Coca-Cola
warned Wall Street in the third quarter that they would not meet consensus
estimates due to a deterioration in global demand for their products. While we
believe these companies are attractively positioned to participate in the
secular growth of worldwide economies, in the short term we expect their profit
margins to contract as consumption on a global basis slows.
In place of the globally oriented companies we have emphasized domestically
oriented companies in the portfolio. Some of our recent purchases include CVS,
Costco Cos. and Liberty Media Group. This tactical move simply represents a
weighting shift that we believe better responds to current economic conditions.
Our long-term strategy with regard to global companies is still in place and
will be re-emphasized when the cyclical forces hampering the growth of the
global companies in the current environment abate.
SOCIAL INVESTMENT REVIEW
The Fund invests in companies that show evidence that they conduct their
business in a manner that contributes to the enhancement of the quality of life
in America. To assess whether a company contributes to this goal, we employ a
rigorous research process to evaluate companies based on their records in the
areas of environment, employee safety, product safety and equal employment
opportunity. Our analysis includes information provided by the companies
themselves, the media, and data from respected social investment research
providers such as Kinder, Lydenberg and Domini, the Investor Responsibility
Research Center, and Environmental Information Services.
We are currently upgrading the environmental research we receive, with a
special emphasis on intra-industry comparisons of corporate environmental
performance. This research will allow us to identify "best in class"
environmental records in a particular industry, rather than eliminate
historically problematic sectors entirely from the Fund.
We communicate with companies in our portfolio, and encourage them to focus on
their performance in our areas of social concern. We recently participated in a
dialogue training seminar with CERES, the Coalition for Environmentally
Responsible Economies, a leading environmental organization that developed the
CERES Principles (formerly the Valdez Principles) for companies. By endorsing
the Principles, companies commit to an ongoing process of continuous
environmental improvement, dialogue, and comprehensive public reporting. We
intend to participate in the next few months as a member of a CERES dialogue
team with one of the companies in the Fund's portfolio.
The Fund also recently invested in a $100,000 Federally insured community
investment certificate of deposit through Self-Help, a credit union based in
Durham, North Carolina. Through the backing of institutions like the Fund,
Self-Help is able to provide small-business and home mortgage loans to North
Carolinians who might not otherwise qualify for capital. Through this unique
investment vehicle, we can secure a competitive rate of return while helping the
same community in which the Fund' s sub-investment adviser, NCM Capital
Management Group. Inc., is based.
Sincerely,
[Paul A. Hilton signature] [Maceo K. Sloan signature]
Paul A. Hilton Maceo K. Sloan
Co-Portfolio Manager Co-Portfolio Manager
The Dreyfus Corporation NCM Capital Management Group, Inc.
January 15, 1999
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.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. DECEMBER 31, 1998
- -----------------------------------------------------------------------------
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
$30,059
Standard & Poor's 500 Composite Stock Price Index*
$29,534
<TABLE>
<CAPTION>
The Dreyfus Socially Responsible Growth Fund, Inc.
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- -----------------------------------------------------------------------------
One Year Ended Five Years Ended From Inception (10/7/93)
December 31, 1998 December 31, 1998 to December 31, 1998
____________________ ____________________ __________________________
<S> <C> <C> <C>
29.38% 22.43% 23.01%
- ------------------------
</TABLE>
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.
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS DECEMBER 31, 1998
Common Stocks--94.5% Shares Value
- ------------------------------------------------------- ____________ _____________
<S> <C> <C> <C>
Consumer Durables--.8% Newell . . . . . . . . . . . . . . . . . . . . . . . . 93,400 $ 3,852,750
_____________
Consumer Non-Durables--7.3% Clorox . . . . . . . . . . . . . . . . . . . . . . 90,400 10,559,850
Hershey Foods . . . . . . . . . . . . . . . . . . . . 134,600 8,370,438
Jones Apparel Group . . . . . . . . . . . . . . . (a) 176,100 3,885,206
PepsiCo . . . . . . . . . . . . . . . . . . . . . . . 105,000 4,298,438
Procter & Gamble . . . . . . . . . . . . . . . . . . . 86,300 7,880,269
_____________
34,994,201
_____________
Consumer Services--1.8% Infinity Broadcasting . . . . . . . . . . . . . . . . 20,600 563,925
Service Corp. International . . . . . . . . . . . . . 112,200 4,270,613
Liberty Media Group . . . . . . . . . . . . . . . (a) 83,900 3,864,644
_____________
8,699,182
_____________
Electronic Technology--15.4% Cisco Systems . . . . . . . . . . . . . . . . . . (a) 130,800 12,139,875
Compaq Computer . . . . . . . . . . . . . . . . . . . 273,500 11,469,906
Intel . . . . . . . . . . . . . . . . . . . . . . . . 61,200 7,256,025
Linear Technology . . . . . . . . . . . . . . . . . . 84,900 7,603,856
Lucent Technologies . . . . . . . . . . . . . . . . . 81,200 8,932,000
Sun Microsystems . . . . . . . . . . . . . . . . . (a) 163,900 14,033,938
Tellabs . . . . . . . . . . . . . . . . . . . . (a) 177,100 12,142,419
_____________
73,578,019
_____________
Energy Minerals--1.3% British Petroleum, A.D.R. . . . . . . . . . . . . . . 64,600 6,137,000
_____________
Finance--14.6% Allstate . . . . . . . . . . . . . . . . . . . . . . . 212,600 8,211,675
American International Group . . . . . . . . . . . . . 199,600 19,286,342
BankAmerica . . . . . . . . . . . . . . . . . . . . . 133,100 8,002,638
Citigroup . . . . . . . . . . . . . . . . . . . . . . 102,400 5,068,800
Conseco . . . . . . . . . . . . . . . . . . . . . . . 132,400 4,046,475
Fannie Mae . . . . . . . . . . . . . . . . . . . . . . 143,000 10,582,000
Franklin Resources . . . . . . . . . . . . . . . . . . 90,200 2,886,400
Marsh & McLennan Cos. . . . . . . . . . . . . . . . . 78,800 4,604,875
Nationwide Financial Services . . . . . . . . . . . . 67,300 3,478,569
Summit Bancorp . . . . . . . . . . . . . . . . . . . . 77,200 3,372,675
_____________
69,540,449
_____________
Health Services--1.8% Cardinal Health . . . . . . . . . . . . . . . . . . . 113,100 8,581,463
_____________
Health Technology--15.0% Amgen . . . . . . . . . . . . . . . . . . . . . . (a) 45,200 4,726,225
Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 103,400 13,836,213
Guidant . . . . . . . . . . . . . . . . . . . . . . . 55,600 6,129,900
Johnson & Johnson . . . . . . . . . . . . . . . . . . 97,100 8,144,263
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1998
Common Stocks--(continued) Shares Value
- ------------------------------------------------------- ____________ _____________
Health Technology (continued) Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . 86,600 $ 7,696,575
Medtronic . . . . . . . . . . . . . . . . . . . . . . 109,500 8,130,375
Merck & Co. . . . . . . . . . . . . . . . . . . . . . 101,200 14,945,975
Schering-Plough . . . . . . . . . . . . . . . . . . . 145,200 8,022,300
_____________
71,631,826
_____________
Process Industries--.9% Avery Dennison . . . . . . . . . . . . . . . . . . . . 93,400 4,208,838
_____________
Producer Manufacturing--5.4% Illinois Tool Works . . . . . . . . . . . . . . . . . 113,000 6,554,000
Pitney Bowes . . . . . . . . . . . . . . . . . . . . . 89,600 5,919,200
Tyco International . . . . . . . . . . . . . . . . . . 79,700 6,012,369
Xerox . . . . . . . . . . . . . . . . . . . . . . . . 62,300 7,351,400
_____________
25,836,969
_____________
Retail Trade--10.8% Costco Cos. . . . . . . . . . . . . . . . . . . . (a) 54,900 3,963,094
CVS . . . . . . . . . . . . . . . . . . . . . . . . . 71,500 3,932,500
Home Depot . . . . . . . . . . . . . . . . . . . . . . 300,200 18,368,488
Safeway . . . . . . . . . . . . . . . . . . . . . (a) 217,400 13,247,813
Wal-Mart Stores . . . . . . . . . . . . . . . . . . . 148,700 12,109,756
_____________
51,621,651
_____________
Technology Services--10.7% Automatic Data Processing . . . . . . . . . . . . . . 66,300 5,316,431
BMC Software . . . . . . . . . . . . . . . . . . . (a) 109,200 4,866,225
Computer Associates International . . . . . . . . . . 172,900 7,369,863
IMS Health . . . . . . . . . . . . . . . . . . . . . . 127,500 9,618,281
Microsoft . . . . . . . . . . . . . . . . . . . . (a) 69,500 9,638,781
Oracle . . . . . . . . . . . . . . . . . . . . . . (a) 333,300 14,373,563
_____________
51,183,144
_____________
Transportation/Airlines--1.0% Southwest Airlines . . . . . . . . . . . . . . . . . . 220,600 4,949,713
_____________
Utilities--7.7% AES . . . . . . . . . . . . . . . . . . . . . . . (a) 172,700 8,181,663
AirTouch Communications . . . . . . . . . . . . . . . 89,300 6,440,763
Ameritech . . . . . . . . . . . . . . . . . . . . (a) 89,500 5,672,063
Bell Atlantic . . . . . . . . . . . . . . . . . . . . 126,400 6,699,200
Enron . . . . . . . . . . . . . . . . . . . . . . . . 70,300 4,011,494
MCI WorldCom . . . . . . . . . . . . . . . . . . . . . 81,800 5,869,150
_____________
36,874,333
_____________
TOTAL COMMON STOCKS
(cost $332,370,711) . . . . . . . . . . . . . . . $451,689,538
_____________
_____________
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1998
Short-Term Investments--4.7% Shares Value
- ------------------------------------------------------- ____________ _____________
Certificates of Deposit--.0% Self Help Credit Union
4.85%, 3/22/1999 . . . . . . . . . . . . . . . . . . . $ 100,000 $ 100,000
_____________
U.S. Treasury Bills--4.7% 3.83%, 1/7/1999 . . . . . . . . . . . . . . . . . . . 428,000 427,750
3.81%, 1/14/1999 . . . . . . . . . . . . . . . . . . . 1,435,000 1,433,139
4.39%, 1/21/1999 . . . . . . . . . . . . . . . . . . . 16,852,000 16,810,797
4.18%, 1/28/1999 . . . . . . . . . . . . . . . . . . . 2,185,000 2,178,860
4.28%, 2/18/1999 . . . . . . . . . . . . . . . . . . . 650,000 646,464
4.37%, 3/18/1999 . . . . . . . . . . . . . . . . . . . 704,000 697,770
_____________
22,194,780
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $22,293,576) . . . . . . . . . . . . . . . . $ 22,294,780
_____________
TOTAL INVESTMENTS (cost $354,664,287). . . . . . . . . . . . . . . . . . . . . . . . . . . 99.2% $473,984,318
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8% $ 3,812,856
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $477,797,174
_______ _____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1998
Cost Value
_____________ _____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $354,664,287 $473,984,318
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 3,959,728
Dividends and interest receivable . . . . . . . . . . . . 219,181
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 5,829
_____________
478,169,056
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 288,284
Accrued expenses . . . . . . . . . . . . . . . . . . . . 83,598
_____________
371,882
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $477,797,174
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $358,857,606
Accumulated net realized gain (loss) on investments . . . (380,463)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 . . . . . . . . . . . . . . . . 119,320,031
_____________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $477,797,174
_____________
SHARES OUTSTANDING
(150 million shares of $.001 par value Common Stock authorized). . . . . . . . . . . . . . 15,372,723
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $31.08
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Cash dividends (net of $13,557 foreign taxes
withheld at source) . . . . . . . . . . . . . $ 2,753,360
Interest . . . . . . . . . . . . . . . . . . . . 820,621
____________
Total Income . . . . . . . . . . . . . . . $ 3,573,981
EXPENSES: Investment advisory fee--Note 3(a) . . . . . . . 2,684,102
Professional fees . . . . . . . . . . . . . . . . 38,208
Registration fees . . . . . . . . . . . . . . . . 36,155
Custodian fees--Note 3(b) . . . . . . . . . . . . 33,836
Prospectus and shareholders' reports . . . . . . 27,358
Shareholder servicing costs--Note 3(b) . . . . . 12,634
Directors' fees and expenses--Note 3(c) . . . . . 10,879
Interest expense--Note 2 . . . . . . . . . . . . 7,360
Loan commitment fees--Note 2 . . . . . . . . . . 1,915
Miscellaneous . . . . . . . . . . . . . . . . . . 14,375
____________
Total Expenses . . . . . . . . . . . . . . 2,866,822
____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707,159
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . $16,201,927
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . 72,812,354
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 89,014,281
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $89,721,440
____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1998 December 31, 1997
_________________ ________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 707,159 $ 893,907
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . 16,201,927 7,810,679
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . 72,812,354 35,064,277
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 89,721,440 43,768,863
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . (738,546) (961,820)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . (17,127,023) (7,501,242)
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,865,569) (8,463,062)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . 310,414,650 210,149,862
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,865,378 8,463,062
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . (198,226,018) (92,601,425)
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . 130,054,010 126,011,499
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . 201,909,881 161,317,300
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,887,293 114,569,993
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $477,797,174 $275,887,293
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,975,458 9,000,188
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . 575,478 339,375
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,226,680) (3,995,287)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . 4,324,256 5,344,276
_____________ _____________
_____________ _____________
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: 1998 1997 1996 1995 1994
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $24.97 $20.09 $17.31 $13.23 $13.38
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .05 .09 .05 .08 .35
Net realized and unrealized gain (loss) on investments . 7.28 5.63 3.63 4.49 (.15)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 7.33 5.72 3.68 4.57 .20
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.05) (.10) (.05) (.08) (.35)
Dividends from net realized gain on investments . . . . . (1.17) (.74) (.85) (.41) --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (1.22) (.84) (.90) (.49) (.35)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . $31.08 $24.97 $20.09 $17.31 $13.23
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 29.38% 28.44% 21.23% 34.56% 1.49%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets . . . . .80% .82% .95% 1.27% .25%
Ratio of interest expense and loan commitment fees
to average net assets . . . . . . . . . . . . . . . . .00%* .00%* .01% -- --
Ratio of net investment income to average net assets . . .20% .46% .42% .70% 4.58%
Decrease reflected in above expense ratios due to
undertakings by Dreyfus and sub-investment adviser . -- -- .03% .06% 2.60%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 67.60% 58.50% 126.41% 88.52% 373.68%
Net Assets, end of period (000's Omitted) . . . . . . . . $477,797 $275,887 $114,570 $31,657 $10,406
- ------------
* Amounts represents less than .01%.
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, as amended (the "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 custody agreement, the Fund receives net
earnings credits based on available cash balances left on deposit.
(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 of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
As of December 31, 1998, the Fund reclassified certain components of net
assets. The reclassifications resulted in a net increase to accumulated
undistributed net investment income of $56,868, a decrease in accumulated net
realized loss on investments of $12,382 and a decrease in paid-in capital of
$69,250. These reclassifications were the result of permanent book to tax
differences. Net assets were not affected by these reclassifications.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
The average daily amount of borrowings outstanding during the period ended
December 31, 1998 was approximately $123,300, with a related weighted average
annualized interest rate of 5.97%
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, 1998, the Fund was
charged $4,500 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, 1998, the Fund was charged $270 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 December 31, 1998, the Fund was
charged $33,836 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.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1998,
amounted to $343,862,684 and $229,539,068, respectively.
At December 31, 1998, accumulated net unrealized appreciation on investments
was $119,320,031, consisting of $121,866,229 gross unrealized appreciation and
$2,546,198 gross unrealized depreciation.
At December 31, 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).
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, 1998, 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, 1998 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, 1998, 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.
New York, New York
January 27, 1999
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $1.12 per share as a
long-term capital gain distribution of the $1.17 per share paid on December 29,
1998 and also designates $.0456 per share as a long-term capital gain
distribution of the $.0516 per share paid on September 14, 1998.
The Fund also designates 92.86% of the ordinary dividends paid during the
fiscal year ended December 31, 1998 as qualifying for the corporate dividends
received deduction.
[reg.tm logo]
(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. 111AR9812
Socially
Responsible
Growth Fund, Inc.
Annual Report
December 31, 1998
Printed on recycled paper.
50% post-consumer.
Process chlorine free.
Vegetable-based ink.
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
12/31/98 30,059 29,534
*Source: Lipper Analytical Services, Inc.
