UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-03074 Northeast Investors Growth Fund (Exact name of registrant as specified in charter) 50 Congress Street, Room 1000 Boston, MA 02109 (Address of principal executive offices) (Zip code) David Randall 50 Congress St. Boston MA, 02109 [Name and Address] (Name and address of agent for service) Registrant's telephone number, including area code: 617-523-3588 Date of fiscal year end: December 31, 2002 Date of reporting period: June 30, 2003 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. 3507. Item 1. Reports to Stockholders. 				 NORTHEAST INVESTORS GROWTH FUND A NO-LOAD FUND Semi-Annual Report For the Period Ending June 30, 2003 Table of Contents Letter to Shareholders 1 Portfolio Transactions 3 Fund Performance 4 Investment Sectors 6 Schedule of Investments 7 Financial Statements 10 Notes to the Financial Statements 15 Trustees & Officers 18 Dear Fellow Shareholders: The enclosed sets forth the activity with Northeast Investors Growth Fund for the first six months of 2003. Although it seems like the distant past, equities began the year strongly in early January before slumping badly as we moved toward war with Iraq. There have been two significant market lows in the past year - October 9, 2002, and March 11 of this year. As of this writing, from the March 11 low, our price has appreciated 25.07%. And for the entire six-month period to June 30, we show a strong 10.24% positive return. Looking back, the equity markets lost about half their value during the three-year period 2000, 2001, and 2002. The year 2000 appeared to be a necessary correction to the "Internet bubble" - 2001 a broader recession and profit slowdown - 2002 scandals that questioned the integrity of financial statements - and earlier this year - war with Iraq. Throughout these difficult years, we have not changed our colors - we have not changed our style - we have not changed our thinking. We have continued to hold, and buy, market leaders in areas when we feel there are above average opportunities for substantial growth in sales and earnings. Most importantly, we have continued to look for investments that touch our daily lives, where there is a first hand knowledge of the product. While this is not always possible, I, for example, can credit my wife for following Whole Foods since she, and many of our friends, are placing a growing importance on eating "healthy". The changes made within the portfolio as outlined on page 3 of this report represent "trimmings" and "modifications" - a reflection of money flows in and out of the fund, and also of a dynamic and ever changing market place. As I write this letter, "things" feel a lot better. As mentioned to many of you, the last time the markets were down four years in a row was seventy years ago, well into the 1930's. As mentioned, equity prices have been about cut in half over the past three years. During this time corporate America has moved on and in many ways become stronger. This improved environment will, we believe, be reflected in improved equity prices going forward. Northeast Investors Growth Fund is well positioned in our view with fiftytwo leading companies to move forward, with adjustments consistent with our overall strategy, in the coming years. As in the past, please write or call me directly with any questions or comments you might have. Our daily closing price is the bottom line and of keen concern to me personally. Ever sincerely, William A. Oates, Jr. President August 1, 2003 <table> <s> <c> <c> <c> Portfolio Transactions (unaudited) January 1, 2003 - June 30, 2003 Additions to Existing Holdings Additions Now Own Citigroup, Inc. 71,500 115,500 Microsoft Corp. 72,000 186,000 New Holdings Now Own Barr Laboratories, Inc. 28,200 Boston Scientific Corp. 25,000 Comcast Corp., Class A 36,000 Corning, Inc. 354,000 eBay, Inc. 12,000 Gilead Sciences, Inc. 38,000 Home Depot, Inc. 31,000 Iron Mountain, Inc. 26,250 Zimmer Holdings, Inc. 23,800 Eliminations/Reductions of Holdings Sold Now Own 3M Co. 4,000 27,700 American International Group, Inc. 31,800 21,769 Analog Devices, Inc. 11,000 25,000 Bristol-Myers Squibb Co. 21,000 48,800 Chubb Corp. 32,500 0 Eaton Vance Corp. 84,000 113,000 First Data Corp. 13,000 94,000 Fifth Third Bancorp 20,000 59,050 Intel Corp. 26,000 128,400 International Business Machines Corp. 13,000 41,800 John Hancock Financial Services, Inc. 51,000 97,000 Johnson & Johnson 9,000 52,400 Lowe's Companies, Inc. 46,500 0 Merck & Co., Inc. 19,000 41,400 Pfizer, Inc. 34,000 121,731 Schering-Plough Corp. 61,600 40,000 Sysco Corp. 16,000 56,000 United Parcel Service, Inc. 8,000 29,500 Viacom, Inc., Class A 46,000 0 Wal-Mart Stores, Inc. 21,000 76,600 Walt Disney Co. 81,000 180,000 Zions Bancorporation 17,000 74,400 </table> Average Annual Total Return (unaudited) One year ended June 30, 2003 (0.65)% Five years ended June 30, 2003 (3.18)% Ten years ended June 30, 2003 9.61% The following graph compares the cumulative total shareholder return on the Northeast Investors Growth Fund shares over the ten preceding years to the cumulative total share return on the Standard & Poor's 500 Index. Assuming an investment of $10,000 in both at their closing prices on January 1, 1993 and reinvestment of dividends and capital gains. For management's discussion of the Growth Fund's 2003 performance, including strategies and market conditions which influenced such performance, see the President's letter to shareholders. tableomitted <table> <s> <c> <c> Performance Graph (01/01/1993 - 06/30/2003) (unaudited) Six Months Ended 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 06/30/03 Northeast Investors $10,244 $10,237 $13,969 $17,406 $23,894 $31,861 $41,142 $34,987 $28,987 $22,415 $24,711 Growth Fund Standard & Poor's $10,992 $11,133 $15,265 $18,727 $24,926 $31,990 $38,721 $35,197 $31,016 $24,161 $27,003 500 Index Page 4 Performance Graph (01/01/1993 - 06/30/2003) (unaudited) </table> <table> <s> <c> <c> <c> Returns and Per Share Data Six Months Year Ended December 31, Ended June 30, 2003 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 (unaudited) Net Asset Value 8.37 8.13 10.59 12.15 15.84 20.47 26.08 20.23 15.43 11.91 13.13 Income Dividend 0.07 0.06 0.07 0.05 0.06 0.05 0.02 0.00 0.00 0.02 0.00 Capital Gains Dist. 1.49 0.17 0.44 0.98 0.77 0.55 0.31 2.05 1.44 0.00 0.00 NEIG Return (%) 2.44 -0.07 36.46 24.60 37.28 33.34 29.13 -14.96 -17.15 -22.67 10.24 S&P 500 Return (%) 9.92 1.28 37.12 22.68 33.10 28.34 21.04 -9.10 -11.88 -22.10 11.76 </table> table omitted <table> <s> <c> <c> <c> Ten Largest Investment Holdings (unaudited) June 30, 2003 Ten Largest Investment Holdings Market Cost Value State Street Corp. $4,629,307 $5,334,760 General Electric Co. 6,238,135 4,984,586 Citigroup, Inc. 4,178,969 4,943,400 Microsoft Corp. 7,157,161 4,769,040 Exxon Mobil Corp. 4,943,843 4,664,062 Mellon Financial Corp. 5,458,615 4,315,125 FleetBoston Financial Corp. 4,714,864 4,267,366 Pfizer, Inc. 4,628,401 4,157,113 Wal-Mart Stores, Inc. 3,329,831 4,111,122 First Data Corp. 2,994,157 3,895,360 Investment Sectors As a Percentage of Net Assets (unaudited) Integrated Oil & Gas 8.23% Financial Services 14.92% Biotechnology 3.63% Banks 14.57% Other 38.21% Conglomerate 6.64% Computer Software & Services 4.65% Pharmaceuticals/Drug 13.33% Medical Products 4.93% Multi-Line Insurance 3.67% Market value of securities equals 112.78% of Net Assets. Schedule of Investments June 30, 2003 (unaudited) Number Market Common Stocks of Value Name of Issuer Shares (Note B) Banks - 14.57% Bank One Corp. 82,000 $3,048,760 Fifth Third Bancorp 59,050 3,390,651 FleetBoston Financial Corp.* 143,634 4,267,366 Mellon Financial Corp. 155,500 4,315,125 Zions Bancorporation 74,400 3,764,640 ---------- 18,786,542 Beverage Softdrink - 1.87% PepsiCo, Inc. 54,100 2,407,450 Beverage Wine/Spirit - 1.39% Brown-Forman Corp., Class B 22,800 1,792,536 Biotechnology - 3.63% Amgen, Inc.^ 39,000 2,571,660 Gilead Sciences, Inc.^ 38,000 2,110,900 --------- 4,682,560 Broadcast Cable TV - 2.48% Comcast Corp., Class A^ 36,000 1,086,480 Cox Communications, Inc.#^ 66,000 2,105,400 --------- 3,191,880 Computer & Electronics - 1.74% Best Buy Co., Inc.*^ 51,000 2,239,920 Computer Software & Services - 4.65% Intuit, Inc.*^ 27,500 1,226,500 Microsoft Corp. 186,000 4,769,040 --------- 5,995,540 Computer Systems - 2.67% International Business Machines Corp. 41,800 3,448,500 Conglomerate - 6.64% 3M Co. 27,700 3,572,746 General Electric Co.* 173,800 4,984,586 --------- 8,557,332 Data Process Management - 0.75% Iron Mountain, Inc.^ 26,250 973,612 Distributors - 1.30% Sysco Corp. 56,000 1,682,240 Diversified Chemical - 1.83% Cabot Corp. 82,000 2,353,400 Electronic Semi-Conductor - 2.75% Analog Devices, Inc. 25,000 870,500 Intel Corp. 128,400 2,672,004 --------- 3,542,504 Financial Services - 14.92% American Express Co. 35,500 1,484,255 Citigroup, Inc. 115,500 4,943,400 Eaton Vance Corp. 113,000 3,570,800 First Data Corp. 94,000 3,895,360 State Street Corp.* 135,400 5,334,760 --------- 19,228,575 Food Retail - 2.05% Whole Foods Market, Inc.#^ 56,200 2,649,268 Home Improvement - Retail - 0.80% Home Depot, Inc. 31,000 1,026,720 Household Products - 2.75% Proctor & Gamble Co. 39,800 3,549,364 Integrated Oil & Gas - 8.23% B P, PLC 51,200 2,151,424 ChevronTexaco Corp. 28,500 2,057,700 Exxon Mobil Corp. 129,882 4,664,062 Royal Dutch Petroleum# 37,200 1,734,264 ---------- 10,607,450 Internet Retail - 0.97% eBay, Inc.^ 12,000 1,248,000 Life & Health - 2.31% John Hancock Financial Services, Inc.^ 97,000 2,980,810 Managed Health - 1.11% Anthem, Inc.^ 18,500 1,427,275 Medical Products - 4.93% Barr Laboratories, Inc.#^ 28,200 1,847,100 Boston Scientific Corp.^ 25,000 1,527,500 Medtronic, Inc. 39,800 1,909,206 Zimmer Holdings, Inc.^ 23,800 1,072,190 --------- 6,355,996 Movies & Entertainment - 2.76% Walt Disney Co. 180,000 3,555,000 Multi-Line Insurance - 3.67% American International Group, Inc.* 21,769 1,201,213 Berkshire Hathaway, Inc., Class B*^ 1,450 3,523,500 --------- 4,724,713 Pharmaceuticals/Drug - 13.33% Abbott Laboratories 73,000 3,194,480 Bristol-Myers Squibb Co. 48,800 1,324,920 Eli Lilly & Co. 36,900 2,544,993 Johnson & Johnson* 52,400 2,709,080 Merck & Co., Inc. 41,400 2,506,770 Pfizer, Inc. 121,731 4,157,113 Schering-Plough Corp. 40,000 744,000 ---------- 17,181,356 Retail - General - 3.19% Wal-Mart Stores, Inc. 76,600 4,111,122 Telecom Equipment - 2.03% Corning, Inc.#^ 354,000 2,616,060 Toiletries/Cosmetics - 2.00% Gillette Co. 81,000 2,580,660 Transportation - 1.46% United Parcel Service, Inc. 29,500 1,879,150 Total Common Stocks - 112.78% - (Cost - $142,147,621) $145,375,535 ------------ Cash Equivalents+ Dreyfus Cash Management Plus Fund - 1.10174% 173,510 Merrimac Cash Fund-Premium Class - 1.05171% 6,000,000 ------------ Total Cash Equivalents - 4.79% (Cost - $6,173,510) $ 6,173,510 ------------ Total Investment Portfolio - 117.57% (Cost - $148,321,131) $151,549,045 Net Other Assets - (17.57%) (22,642,105) ------------ Total Net Assets - 100.00% $128,906,940 * All or a portion of this security is pledged to collateralize short-term borrowings ^ Non-income producing security # Currently out on loan + Security held as collateral for securities on loan. The rate quoted is the annualized seven-day yield of the fund at period end. (See Note H) The accompanying notes are an integral part of the financial statements. Statement of Assets and Liabilities (unaudited) - ---------------------------------------------------------------------------------------------------- June 30, 2003 - ---------------------------------------------------------------------------------------------------- Assets Investments - at market value (including securities loaned of $6,007,575) (cost $148,321,131) - see note I $151,549,045 Dividends receivable 177,479 Receivable for fund shares sold 9,932 ------------ Total Assets $151,736,456 Liabilities Short-term borrowing $16,460,944 Collateral on securities loaned, at value - see note I 6,173,510 Payable for fund shares repurchased 40,253 Accrued investment advisory fee 62,204 Accrued expenses 92,605 ----------- Total Liabilities 22,829,516 ----------- Net Assets $128,906,940 Net Assets Consist of: Capital paid-in $141,778,661 Undistributed net investment income 106,385 Accumulated net realized loss (16,206,020) Net unrealized appreciation of investments 3,227,914 ------------ Net Assets $128,906,940 ============ Net Asset Value, offering price and redemption price per share ($128,906,940/9,824,770 shares) $13.13 ====== The accompanying notes are an integral part of the financial statements. Statement of Operations (unaudited) - ----------------------------------------------------------------------------------------------------- Six Months Ended June 30, 2003 - ----------------------------------------------------------------------------------------------------- Investment Income Dividend income $1,049,223 Other income 2,598 ----------- Total Income 1,051,821 Expenses Investment advisory fee $356,832 Administrative expenses and salaries 200,408 Interest expense 154,990 Printing, postage, and stationary 56,200 Computer and related expenses 47,925 Legal fees 36,200 Insurance fees 27,100 Audit fees 18,990 Registration and filing fees 13,575 Trustee fees 9,955 Telephone expense 9,050 Commitment fee 8,065 Custodian fees 6,154 Miscellaneous fees 8,145 ----------- Total Expenses 953,589 ----------- Net Investment Income 98,232 Realized and Unrealized Gain (Loss) on Investments Net realized loss from investment transactions (2,979,750) Change in unrealized appreciation(depreciation) of investments 15,151,274 ----------- Net realized and unrealized loss on investments 12,171,524 Net Increase in Net Assets Resulting from Operations $12,269,756 =========== The accompanying notes are an integral part of the financial statements. Statements of Changes in Net Assets Six Months Ended Year Ended June 30, 2003 December 31, (unaudited) 2002 Increase (Decrease) in Net Assets From Operations: Net investment income (loss) $98,232 $259,677 Net realized gain (loss) from investment transactions (2,979,750) (3,378,604) Change in unrealized appreciation/(depreciation) of investments 15,151,274 (36,690,613) ----------- ------------- Net Increase (Decrease) in Net Assets Resulting from Operations 12,269,756 (39,809,540) Distributions to Shareholders From net investment income - (251,524) From net realized gains on investments - - ----------- ------------- Total Distributions - (251,524) From Net Fund Share Transactions (9,348,539) (21,171,251) ------------ ------------- Total Increase (Decrease) in Net Assets 2,921,217 (61,232,315) Net Assets: Beginning of Period 125,985,723 187,218,038 ------------ ------------ End of Period $128,906,940 $125,985,723 ============ ============ The accompanying notes are an integral part of the financial statements. Financial Highlights Year Ended December 31, Six Months Ended June 30,2003 (unaudited) 2002 2001 2000 1999 1998 Per Share Data Net Asset Value: Beginning of Period $11.91 $15.43 $20.23 $26.08 $20.47 $15.84 Income From Investment Operations: Net investment gain(loss) 0.01 0.02 (0.01) (0.09) 0.01 0.05 Net realized and unrealized gain (loss) on investment 1.21 (3.52) (3.35) (3.71) 5.93 5.18 ----- ------ ------ ------ ---- ---- Total from investment operations 1.22 (3.50) (3.36) (3.80) 5.94 5.23 Less Distributions: Net investment income 0.00 (0.02) 0.00 0.00 (0.02) (0.05) Capital gain 0.00 0.00 (1.44) (2.05) (0.31) (0.55) ------ ------ ------ ------ ------ ------ Total Distributions 0.00 (0.02) (1.44) (2.05) (0.33) (0.60) Net Asset Value: End of Period $13.13 $11.91 $15.43 $20.23 $26.08 $20.47 Total Return 10.24%* -22.67% -17.15% -14.96% 29.13% 33.34% Ratios & Supplemental Data Net assets end of period (in millions) $128,907 $125,986 $187,218 $272,222 $357,650 $211,259 Ratio of operating expenses to average net assets (includes interest expenses) 1.53% 1.31% 1.14% 0.97% 0.85% 0.94% Ratio of interest expense to average net assets 0.25% 0.21% 0.14% 0.22% 0.10% 0.12% Ratio of net investment income to average net assets 0.16% 0.17% -0.05% -0.34% 0.03% 0.44% Portfolio turnover rate 21% 26% 30% 33% 31% 19% # All per share data as of December 31, 1996 and earlier has been restated to reflect a 3 to 1 stock split effective September 25, 1997 ^ Average share method used to calculate per share data * Not annualized Financial Highlights Year Ended December 31, 1997 1996 1995 1994 1993 Net Asset Value: Beginning of Period $12.15 $10.59 $8.13 $8.37 $9.70 Income From Investment Operations: Net investment gain(loss) 0.06 0.05 0.07 0.06 0.07 Net realized and unrealized gain (loss) on investment 4.46 2.54 2.90 (0.07) 0.16 ----- ----- ----- ------ ----- Total from investment operations 4.52 2.59 2.97 (0.01) 0.23 Less Distributions: Net investment income (0.06) (0.05) (0.07) (0.06) (0.07) Capital gain (0.77) (0.98) (0.44) (0.17) (1.49) ------ ------ ------ ------ ------ Total Distributions (0.83) (1.03) (0.51) (0.23) (1.56) Net Asset Value: End of Period $15.84 $12.15 $10.59 $8.13 $8.37 Total Return 37.28% 24.60% 36.46% -0.07% 2.44% Ratios & Supplemental Data Net assets end of period (in millions) $108,590 $60,275 $48,337 $35,459 $38,694 Ratio of operating expenses to average net assets (includes interest expenses) 0.97% 1.21% 1.37% 1.53% 1.45% Ratios of interest expense to average net assets 0.02% - - - - Ratio of net investment income to average net assets 0.45% 0.47% 0.74% 0.74% 0.62% Portfolio turnover rate 16% 25% 27% 26% 35% All per share data as of December 31, 1996 and earlier has been restated to reflect a 3 to 1 stock split effective September 25, 1997 Average share method used to calculate per share data </table> Notes to Financial Statements (unaudited) Note A - Organization Northeast Investors Growth Fund (the "Fund") is a diversified, no-load, open-end, series-type management investment company registered under the Investment Company Act of 1940, as amended. The Fund presently consists of one portfolio and is organized as a Massachusetts business trust. The Fund's objective is to produce long term growth for its shareholders. Note B-Significant Accounting Policies Significant accounting policies of the Fund are as follows: Valuation of Investments: Investments in securities traded on national securities exchanges are valued based upon closing prices on the exchanges. Securities traded in the over-the-counter market and listed securities with no sales on the date of valuation are valued at closing bid prices. Repurchase agreements are valued at cost with earned interest included in interest receivable. Other short-term investments, when held by the Fund, are valued at cost plus earned discount or interest which approximates market value. Securities and other assets for which market quotations are not readily available (including restricted securities, if any) are valued at their fair value as determined in good faith under consistently applied procedures approved by the Board of Trustees. Security Transactions: Investment security transactions are recorded on the date of purchase or sale. Net realized gain or loss on sales of investments is determined on the basis of identified cost. Federal Income Taxes: No provision for federal income taxes is necessary since the Fund has elected to qualify under subchapter M of the Internal Revenue Code and its policy is to distribute all of its taxable income, including net realized capital gains, within the prescribed time periods. State Income Taxes: Because the Fund has been organized by an Agreement and Declaration of Trust executed under the laws of the Commonwealth of Massachusetts, it is not subject to state income or excise taxes. Distributions and Income: Income and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for capital loss carryovers and losses deferred due to wash sales. Permanent book and tax differences relating to shareholder distributions will result in reclassifications to paid-in-capital. The Fund's distributions and dividend income are recorded on the ex-dividend date. Interest income, which consists of interest from repurchase agreements, is accrued as earned. Net Asset Value: In determining the net asset value per share, rounding adjustments are made for fractions of a cent to the next higher cent. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Note C - Investment Advisory and Service Contract and Affiliated Expenses The Fund has its investment advisory and service contract with Northeast Management & Research Company, Inc. (the "Advisor"). Under the contract, the Fund pays the Advisor an annual fee at a maximum rate of 1% of the first $10,000,000 of the Fund's average daily net assets, 3/4 of 1% of the next $20,000,000 and 1/2 of 1% of the average daily net assets in excess of $30,000,000, in monthly installments on the basis of the average daily net assets during the month preceding payment. All trustees except Messrs. John C. Emery and Michael Baldwin are officers or directors of the Advisor. The compensation of all disinterested trustees of the Fund is borne by the Fund. Under the Fund's Investment Advisory Agreement (the "Agreement"), personnel of the Advisor provide the Fund with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Fund's organization. The Advisor also provides the Fund with necessary office space and portfolio accounting and bookkeeping services. The salaries of all officers of the Fund and of all Directors who are "affiliated persons" of the Fund or of the Advisor, and all personnel of the fund or of the Advisor performing services relating to research, statistical and investment activities are paid by the Advisor. The Fund pays expenses, including the salaries of employees engaged in activities, related to its role as transfer, dividend paying and shareholder servicing agent. Note D - Purchases and Sales of Investments The cost of purchases and proceeds from sales of investments, other than short-term securities, aggregated $14,785,800 and $23,910,625, respectively, for the six months ended June 30, 2003. Note E - Shares of Beneficial Interest At June 30, 2003, there was an unlimited number of shares of beneficial interest authorized with no par value. Transactions in shares of beneficial interest were as follows: <table> <s> <c> <c> <c> 2003 2002 ------------------------ ------------------------- Shares Amount Shares Amount Shares sold 216,744 $2,636,026 2,325,562 $32,176,655 Shares issued to shareholders in reinvestment of distributions from net investment income and realized gains from security transactions 0 0 17,697 219,978 ------- ---------- --------- ---------- 216,744 $2,636,026 2,343,259 $32,396,633 Shares repurchased (976,412) $(11,984,565) (3,894,744) $(53,567,884) Net increase (759,668) $(9,348,539) (1,551,485) $(21,171,251) </table> Note F - Committed Line of Credit Short-term bank borrowings, which do not require maintenance of compensating balances, are generally on a demand basis and are at rates equal to adjusted money market interest rates in effect during the period in which such loans are outstanding. The Fund has entered an agreement which enables the Fund to borrow up to $25,000,000 from an unsecured line of credit State Street Bank and Trust. At June 30, 2003, the Fund had unused lines of credit amounting to $8,539,056. In addition the Fund pays a commitment fee of 0.12% per annum, payable at the end of each quarter based on the unused portion of the line of credit. The following information relates to aggregate short-term borrowings during the six months ended June 30, 2003: Average amount outstanding (total of daily outstanding principal balances divided by number of days during the period) $15,205,324 Weighted average interest rate (actual interest expense on short-term borrowing divided by average short-term borrowings outstanding) 2.11% Note G - Additional Tax Information As of December 31, 2002, the components of accumulated earnings (losses) on a tax basis were as follows: Undistributed (distributions in excess of) ordinary income - net $ 8,012 Capital loss carryforward (9,087,084) Timing Differences (post October losses) (4,109,643) Unrealized gains (losses) - net (11,952,762) ------------- Total accumulated earnings (losses - net) $(25,141,477) Capital loss carryforward year of expiration (2009) At June 30, 2003 the Fund's aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows: Gross unrealized gain $ 13,979,040 Gross unrealized loss (10,751,126) ------------ Net unrealized security gain (loss) $ 3,227,914 Note H - Securities Lending The Fund may seek additional income by lending portfolio securities to qualified institutions. The Fund will receive cash or securities as collateral in an amount equal to at least 102% of the current market value of any loaned securities plus accrued interest. By reinvesting any cash collateral it receives in these transactions, the Fund could realize additional gains and losses. If the borrower fails to return the securities and the value of the collateral has declined during the term of the loan, the Fund will bear the loss. At June 30,2003, the value of securities loaned and the value of collateral was $6,007,575 and $6,173,510, respectively. During the six months ended June 30, 2003, income from securities lending amounted to $1,803. The value of loaned securities and cash collateral at period end are disclosed on the Fund's statement of assets and liabilities. Trustees and Officers The Trustees of Northeast Investors Growth Fund are William A. Oates Jr., Ernest E. Monrad, Robert B. Minturn, John C. Emery, and Michael Baldwin. Under Massachusetts law, the Trustees are generally responsible for the management of Northeast Investors Growth Fund. The following table provides certain information about the Fund's Trustees and Officers: The Statement of Additional Information (SAI) contains additional information about the trustees and is available without charge upon request by calling the Fund at 1-800-225-6704. <table> <s> <c> <c> <c> <c> <c> Principal Length of Occupation(s) Other Position(s) Held Time During Directorships Name, Address and Age with Trust Served(1) Last 5 Years held by Trustee AFFILIATED TRUSTEES AND FUND OFFICERS William A. Oates, Jr. President and 22 years Trustee and 50 Congress Street Trustee President of Boston, MA Northeast Investors Age 61 Growth Fund Ernest E. Monrad Trustee 22 years Trustee of the Century Shares 50 Congress Street Northeast Investors Trust Boston, MA Trust Century Capital Age 73 Management Trust The New America High Income Fund, Inc. Northeast Investors Trust Gordon C. Barrett Senior Vice 9 years Officer of the 50 Congress Street President and Northeast Investors Boston, MA Treasurer Growth Fund, Age 46 Northeast Investors Trust, Northeast Investment Management, Inc. Robert B. Minturn Trustee, Clerk, 22 years Clerk and Trustee Northeast Investors 50 Congress Street and Vice of the Northeast Trust Boston, MA President Investors Trust Age 63 INDEPENDENT TRUSTEES John C. Emery Trustee 22 years Partner, Law Firm One Post Office Square of Sullivan & Boston, MA Worcester Age 72 Michael Baldwin Trustee 3 years Partner, Baldwin 3 Barnabas Road Brothers, Inc. Marion, MA Age 62 (1) The Trustees serve until their resignation or the appointment of a successor and the officers serve at the pleasure of the Trustees. </table> Trustees William A. Oates, Jr. Ernest E. Monrad Robert B. Minturn John C. Emery Michael Baldwin Officers William A. Oates, Jr., President Gordon C. Barrett, Senior Vice President & Treasurer Ernest E. Monrad, Assistant Treasurer Robert B. Minturn, Vice President & Clerk Bruce H. Monrad, Vice President Richard J. Semple, Vice President David A. Randall, Vice President Investment Advisors Northeast Management & Research Company, Inc. 50 Congress Street Boston, Massachusetts 02109 Custodian Investors Bank & Trust Company 200 Clarendon Street Boston, Massachusetts 02205 Legal Counsel Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, Massachusetts 02111 Transfer Agent Northeast Investors Growth Fund 50 Congress Street Boston, Massachusetts 02109 This report is prepared for the information of the shareholders of Northeast Investors Growth Fund and must not be given to others unless preceded or accompanied by a copy of the current Prospectus by which all offerings of the Fund shares are made. It should be noted in reading this report and the letter to shareholders that the record of past performance is not a representation as to the Fund's future performance, and that the Fund's investments are subject to market risks. Shares of the Fund are sold to investors at net asset value by Northeast Investors Growth Fund 50 Congress Street Boston, Massachusetts 02109 800-225-6704 )617-523-3588 www.northeastinvestors.com The share price for Northeast Investors Growth Fund is quoted daily in the Mutual Funds section of most major newspapers under several abbreviations including: NE Inv GR, NE Investor. Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures. (a) The registrant's principal executive and financial officers, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended), have concluded that, based on such evaluation, the registrant's disclosure controls and procedures were effective as of a date within 90 days of the filing of this report. (b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a)(1) Not applicable. (a)(2) 99.CERT Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. (b) 99.906CERT A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Northeast Investors Growth Fund By (Signature and Title) William A. Oates, Jr. President (Principal Executive Officer) Date: September 8, 2003 By (Signature and Title) Gordon C. Barrett Treasurer (Principal Financial Officer) Date: September 8, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) William A. Oates, Jr. President (Principal Executive Officer) Date: September 8, 2003 By (Signature and Title) Gordon C. Barrett Treasurer (Principal Financial Officer) Date: September 8, 2003 Exhibit 99.CERT Certification Pursuant to Section 302 of the Sarbanes-Oxley Act I, William A. Oates, Jr., certify that: 1. I have reviewed this report on Form N-CSR of Northeast Investors Growth Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 8, 2003 William A. Oates, Jr. President (Principal Executive Officer) Certification Pursuant to Section 302 of the Sarbanes-Oxley Act I, Gordon C. Barrett, certify that: 1. I have reviewed this report on Form N-CSR of Northeast Investors Growth Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 8, 2003 Gordon C. Barrett Treasurer (Principal Financial Officer) Exhibit 99.906CERT Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Northeast Investors Growth Fund, a Massachusetts business trust (the "Registrant"), does hereby certify, to such officer's knowledge, that: The report on Form N-CSR for the period ended June 30, 2003 of the Company (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: September 8, 2003 William A. Oates, Jr. President (Principal Executive Officer) Dated: September 8, 2003 Gordon C. Barrett Treasurer (Principal Financial Officer) The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.