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)
150 Federal Street
Boston, MA 02110
(Address of principal executive offices) (Zip code)
David Randall
150 Federal Street
Boston, MA 02110
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-523-3588
Date of fiscal year end: December 31, 2003
Date of reporting period: December 31, 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
Annual Report
For the Year Ended
December 31, 2003
Table of Contents
Letter to Shareholders 3
Portfolio Transactions (unaudited) 4
Fund Performance 6
Investment Sectors 8
Schedule of Investments 9
Financial Statements 13
Notes to the Financial Statements 17
Report of Ernst & Young Independent Auditors 20
Trustees & Officers 21
Dear Fellow Shareholders:
As I write, the year 2003 seems like ancient history, moving rapidly, as
we are, into the Presidential primaries and an upcoming election year.
In fact, 2003 was a signi.cant year for the fund as we posted a total
return of +28.4%, just shy of the +28.7% recorded by the S&P 500. The year
2003 also put an end to a three-year market decline and seems to have
restored some stability in the equity markets as a whole.
Throughout this three year market decline, and last year, our aims and
objectives remained the same - namely to buy and hold well-managed
companies whose business affords a healthy outlook for significant growth in
revenues and earnings.
During the past year, we have not hesitated to trim the sails and alter
our course with some of the holdings inasmuch as economic and market
conditions change quickly. However, as I am sure you will see with a quick
look at this report, we have our shareholder funds spread over fifty-four
interesting investments which we believe will serve you well over the
foreseeable future.
I would be remiss not to mention the Securities and Exchange
Commission and the New York State investigations of the mutual fund
industry, its practices and the sad findings that a number of firms have
violated the con.dence shareholders have placed in them. Northeast
Investors Growth Fund has in place procedures and agreements designed to
prevent so-called "late trading", and we do not believe your fund has been
the victim of any late trading activities, nor, to our knowledge, have any of
our employees bought or sold your fund in an unauthorized way. As a noload
fund, we have not paid anyone to sell our shares, nor have we
experienced any detrimental short-term trading in the fund itself. Said
simply, to the best of our knowledge, we are managing the fund in
accordance with the rules of the road.
Effective March 1, 2004 we are moving our offices - a mere three
blocks away - to 150 Federal Street, Boston - with a different zip code -
02110. Our telephone numbers and all else remain the same. We have
outgrown our current space and look forward to this change and the
freshness that it brings.
As always, 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
February 19, 2004
Portfolio Transactions (unaudited)
January 1, 2003-December 31, 2003
Additions to Existing Holdings
Additions Now Own
3M Co. 17,300 49,000
Analog Devices 28,000 64,000
Citigroup, Inc. 71,500 115,500
Medtronic, Inc. 10,000 49,800
Microsoft Corp. 70,000 184,000
New Holdings
Now Own
Banknorth Group, Inc. 31,000
Barr Pharmaceuticals, Inc. 34,200
Boston Scientific Corp. 61,500
Cisco Systems, Inc. 133,000
Comcast Corp., Class A 48,900
Corning, Inc. 394,000
Dell, Inc. 67,200
Ebay, Inc. 43,000
Gilead Sciences, Inc. 38,000
Home Depot, Inc. 46,000
Iron Mountain, Inc. 39,050
Teva Pharmaceutical Industries, LTD. 35,100
Time Warner, Inc. 133,000
XM Satellite Radio Holdings, Class A 86,000
Zimmer Holdings 47,800
Eliminations/Reductions of Holdings
Sold Now Own
Abbott Laboratories 36,000 37,000
American International Group 53,569 0
Bank One Corp. 25,000 57,000
Berkshire Hathaway, Inc., Class B 1,450 0
Bristol-Myers Squibb Co. 69,800 0
Brown-Forman Corp., Class B 22,800 0
ChevronTexaco Corp. 6,700 21,800
Chubb Corp. 32,500 0
Eaton Vance Corp. 84,000 113,000
Eli Lilly & Co. 15,000 21,900
Exxon Mobil Corp. 14,000 115,882
Fifth Third Bancorp. 20,000 59,050
First Data Corp. 39,000 68,000
FleetBoston Financial Corp. 33,000 110,634
General Electric Co. 19,300 154,500
Intel Corp. 26,000 128,400
International Business Machines Corp. 13,000 41,800
John Hancock Financial Services 148,000 0
Johnson & Johnson 9,000 52,400
Lowe's Companies, Inc. 46,500 0
Mellon Financial Corp. 33,000 122,500
Merck & Co., Inc. 60,400 0
Pfizer, Inc. 34,000 121,731
Proctor & Gamble Co. 5,600 34,200
Schering-Plough Corp. 101,600 0
State Street Corp. 54,000 81,400
Sysco Corp. 36,000 36,000
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. 119,000 142,000
Zions Bancorporation 17,000 74,400
Average Annual Total Return
One year ended December 31, 2003 28.39%
Five years ended December 31, 2003 -2.01%
Ten years ended December 31, 2003 10.88%
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, 1994 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.
Table Omitted
<table>
<s> <c> <c> <c> <c> <c>
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Northeast
Investors $9,993 $13,636 $16,991 $23,325 $31,102 $40,162 $34,154 $28,296 $21,882 $28,094
Growth
Fund
Standard
& Poor's $10,128 $13,888 $17,037 $22,677 $29,103 $35,226 $32,021 $28,217 $21,981 $28,285
500 Index
</table>
Returns and Per Share Data
<table>
<s> <c> <c> <c> <c> <c>
Year Ended December 31,
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Net Asset Value 8.13 10.59 12.15 15.84 20.47 26.08 20.23 15.43 11.91 15.26
Income Dividend 0.06 0.07 0.05 0.06 0.05 0.02 0.00 0.00 0.02 0.03
Capital Gains Dist. 0.17 0.44 0.98 0.77 0.55 0.31 2.05 1.44 0.00 0.00
NEIG Return (%) -0.07 36.46 24.60 37.28 33.34 29.13 -14.96 -17.15 -22.67 28.39
S&P 500 Return (%) 1.28 37.12 22.68 33.10 28.34 21.04 -9.10 -11.88 -22.10 28.68
Table Omitted
</table>
Ten Largest Investment Holdings
December 31, 2003
Ten Largest Investment Holdings
Market
Cost Value
Citigroup, Inc. $4,178,969 $5,606,370
Microsoft Corp. 7,256,553 5,036,080
FleetBoston Financial Corp. 4,072,406 4,829,174
General Electric Co. 5,556,965 4,786,410
Exxon Mobil Corp. 4,437,477 4,751,162
Zions Bancorporation 4,121,592 4,563,696
Pfizer, Inc. 4,628,401 4,300,756
State Street Corp. 3,117,209 4,239,312
3M Co. 2,727,544 4,166,470
Eaton Vance Corp. 2,580,247 4,140,320
Investment Sectors As a Percentage of Net Assets
Integrated Oil & Gas 7.85%
Pharmaceuticals/Drug 10.52%
Conglomerate 6.33%
Banks 11.65%
Other 48.97%
Semiconductors 4.97%
Communications Equipment 5.18%
Health Care Equipment 5.68%
Financial/Custody 13.87%
Computer Hardware 4.35%
Market value of securities equals 119.37% of Net Assets.
Chart Omitted
<table>
<s> <c> <c> <c> <c>
Schedule of Investments December 31, 2003
Number Market Percent
Common Stocks of Value of Net
Name of Issuer Shares (Note B) Assets
Air Freight & Logistics
United Parcel Service, Inc. 29,500 $ 2,199,225 1.55%
Application Software
Intuit, Inc.*^ 27,500 1,453,650 1.03%
Asset Management & Custodian
Mellon Financial Corp. 122,500 3,933,475
State Street Corp. 81,400 4,239,312
-----------
8,172,787 5.77%
Biotechnology
Amgen, Inc.^ 39,000 2,409,810
Gilead Sciences, Inc.^ 38,000 2,214,640
-----------
4,624,450 3.27%
Broadcast Cable TV
Comcast Corp., Class A^ 48,900 1,603,431
Cox Communications, Inc.^# 66,000 2,273,700
-----------
3,877,131 2.74%
Communications Equipment
Cisco Systems, Inc. 133,000 3,222,590
Corning, Inc.*# 394,000 4,109,420
-----------
7,332,010 5.18%
Computer & Electronics
Best Buy Co., Inc. 51,000 2,664,240 1.88%
Computer Hardware
Dell, Inc.^ 67,200 2,283,456
International Business Machines Corp. 41,800 3,874,024
-----------
6,157,480 4.35%
Conglomerate
3M Co.* 49,000 4,166,470
General Electric Co.* 154,500 4,786,410
-----------
8,952,880 6.33%
Consumer Finance
American Express Co. 35,500 1,712,165 1.21%
Data Processing
First Data Corp. 68,000 2,794,120
Iron Mountain, Inc.^ 39,050 1,544,037
-----------
4,338,157 3.06%
Diversified Banks
Bank One Corp.* 57,000 2,598,630
FleetBoston Financial Corp.* 110,634 4,829,174
-----------
7,427,804 5.25%
Diversified Chemical
Cabot Corp. 82,000 2,610,880 1.85%
Diversified Financial Services
Citigroup, Inc.* 115,500 5,606,370 3.96%
Semiconductors
Analog Devices# 64,000 2,921,600
Intel Corp.* 128,400 4,115,220
-----------
7,036,820 4.97%
Financial Services Misc.
Eaton Vance Corp. 113,000 4,140,320 2.92%
Food Distributors
Sysco Corp. 36,000 1,340,280 0.95%
Food Retail
Whole Foods Market, Inc. 56,200 3,772,706 2.67%
Health Care Equipment
Boston Scientific Corp.^ 61,500 2,260,740
Medtronic, Inc. 49,800 2,420,778
Zimmer Holdings^ 47,800 3,365,120
-----------
8,046,638 5.68%
Home Improvement Retail
Home Depot, Inc. 46,000 1,632,540 1.15%
Household Products
Proctor & Gamble 34,200 3,415,896 2.41%
Internet Retail
Ebay, Inc.^ 43,000 2,778,230 1.96%
Integrated Oil & Gas
B P Amoco, PLC 51,200 2,526,720
ChevronTexaco Corp. 21,800 1,883,302
Exxon Mobil Corp.* 115,882 4,751,162
Royal Dutch Petroleum 37,200 1,948,908
-----------
11,110,092 7.85%
Major Regional Banks
Banknorth Group, Inc.^ 31,000 1,008,430
Fifth Third Bancorp 59,050 3,489,855
Zions Bancorporation 74,400 4,563,696
-----------
9,061,981 6.40%
Managed Health
Anthem, Inc.^# 18,500 1,387,500 0.98%
Movies & Entertainment
Time Warner, Inc.^ 133,000 2,392,670
Walt Disney Co.* 142,000 3,312,860
-----------
5,705,530 4.03%
Personal Products
Gillette Co. 81,000 2,975,130 2.10%
Pharmaceuticals/Drug
Abbott Laboratories* 37,000 1,724,200
Barr Pharmaceuticals, Inc.^# 34,200 2,631,690
Eli Lilly & Co. 21,900 1,540,227
Johnson & Johnson* 52,400 2,706,984
Pfizer, Inc. 121,731 4,300,756
Teva Pharmaceutical Industries, LTD 35,100 1,990,521
-----------
14,894,378 10.52%
Radio
XM Satellite Radio Holdings, Class A^# 86,000 2,260,940 1.60%
Retail-General
Wal-Mart Stores, Inc. 76,600 4,063,630 2.87%
Soft Drinks
PepsiCo, Inc. 54,100 2,522,142 1.78%
Systems Software
Microsoft Corp. 184,000 5,036,080 3.56%
Total Common Stocks (Cost-$133,616,114) 158,310,062 111.83%
Cash Equivalents
Dreyfus Cash Management Plus Fund+-0.93535% 6,500,000 $ 6,500,000
Merrimac Cash Fund-Premium Class+-0.9764% 4,169,999 4,169,999
Total Cash Equivalents (Cost-$10,669,999) $10,669,999 7.54%
Total Investment Portfolio (Cost-$144,286,113) 168,980,061 119.37%
Total Assets and Liabilities (27,419,518) -19.37%
Total Net Assets $141,560,543 100.00%
* 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 loan. The rate quoted is the annualized seven day yield of the fund
at period end. (See Note I)
The accompanying notes are an integral part of the .nancial statements.
</table>
Statement of Assets and Liabilities
December 31, 2003
Assets
Investments-at market value (including securities loaned of $10,302,513)
(cost $144,286,113)-see note I $168,980,061
Dividends receivable 179,152
Receivable for shares of bene.cial interest sold 132,291
-------------
Total Assets $169,291,504
Liabilities
Short-term borrowing $16,832,482
Collateral on securities loaned, at value-see note I 10,669,999
Payable for shares of bene.cial interest repurchased 86,168
Accrued investment advisory fee 65,272
Accrued expenses 77,040
-----------
Total Liabilities 27,730,961
Net Assets $141,560,543
Net Assets Consist of:
Capital paid-in $134,047,946
Accumulated net realized loss (17,181,351)
Net unrealized appreciation of investments 24,693,948
-------------
Net Assets $141,560,543
Net Asset Value, offering price and redemption price per share
($141,560,543/9,278,207 shares) $15.26
------
The accompanying notes are an integral part of the financial statements.
Statement of Operations
Year Ended December 31, 2003
Investment Income
Dividend income $2,104,827
Other income 24,108
-----------
Total Income 2,128,935
Expenses
Investment advisory fee $744,809
Administrative expenses and salaries 392,495
Interest expense 283,316
Printing, postage and stationary 83,300
Legal fees 82,000
Computer and related expenses 75,125
Audit fees 71,250
Insurance 37,500
Registration and filing fees 25,375
Trustee fees 20,000
Commitment fee 14,871
Telephone expense 13,250
Custodian fees 6,710
Miscellaneous fees 7,425
---------
Total Expenses 1,857,426
Net Investment Income 271,509
--------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss from investment transactions (3,955,081)
Change in unrealized appreciation (depreciation) of investments 36,617,308
-----------
Net realized and unrealized gain on investments 32,662,227
Net Increase in Net Assets Resulting from Operations $32,933,736
-----------
The accompanying notes are an integral part of the financial statements.
<table>
<s> <c> <c> <c>
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
2003 2002
Increase (Decrease) in Net Assets
From Operations:
Net investment income $271,509 $259,677
Net realized loss from investment transactions (3,955,081) (3,378,604)
Change in unrealized appreciation (depreciation) of investments 36,617,308 (36,690,613)
------------ -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 32,933,736 (39,809,540)
----------- -------------
Distributions to Shareholders
From net investment income (279,662) (251,524)
From net realized gains on investments - -
--------- ---------
Total Distributions (279,662) (251,524)
--------- ---------
From Net Fund Share Transactions (17,079,254) (21,171,251)
------------ ------------
Total Increase (Decrease) in Net Assets 15,574,820 (61,232,315)
Net Assets:
Beginning of Period 125,985,723 187,218,038
------------ ------------
End of Period $141,560,543 $125,985,723
------------- -------------
The accompanying notes are an integral part of the financial statements.
</table>
<table>
<s> <c> <c> <c> <c> <c>
Financial Highlights
Year Ended December 31,
2003 2002 2001 2000 1999
Per Share Data^
Net Asset Value:
Beginning of Period $11.91 $15.43 $20.23 $26.08 $20.47
Income From Investment
Operations:
Net investment gain(loss) 0.03 0.02 (0.01) (0.09) 0.01
Net realized and unrealized gain
(loss) on investment 3.35 (3.52) (3.35) (3.71) 5.93
----- ------ ------ ------ ----
Total from investment operations 3.38 (3.50) (3.36) (3.80) 5.94
Less Distributions:
Net investment income (0.03) (0.02) 0.00 0.00 (0.02)
Capital gain -- 0.00 (1.44) (2.05) (0.31)
------ ------ ------ ------ ------
Total Distributions (0.03) (0.02) (1.44) (2.05) (0.33)
Net Asset Value:
End of Period $15.26 $11.91 $15.43 $20.23 $26.08
Total Return 28.39% -22.67% -17.15% -14.96% 29.13%
Ratios & Supplemental Data
Net assets end of period
(in millions) $141,561 $125,986 $187,218 $272,222 $357,650
Ratio of operating expenses to
average net assets (includes interest
expenses) 1.43% 1.31% 1.14% 0.97% 0.85%
Ratio of interest expense to
average net assets 0.22% 0.21% 0.14% 0.22% 0.10%
Ratio of net investment income
to average net assets 0.21% 0.17% -0.05% -0.34% 0.03%
Portfolio turnover rate 25% 26% 30% 33% 31%
^Average share method used to calculate per share data
</table>
Notes to Financial Statements
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. 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 reclassi.cations to paid-incapital.
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.
Use of Estimates: The preparation of .nancial statements in conformity with
accounting principles generally accepted in the United States 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 .nancial 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 of.cers 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 of.ce space and portfolio accounting and bookkeeping services. The
salaries of all of.cers 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 $35,392,313 and $52,073,315, respectively,
for the year ended December 31, 2003.
Note E-Shares of Beneficial Interest
At December 31, 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 441,531 $ 5,812,191 2,325,562 $ 32,176,655
Shares issued to shareholders
in reinvestment of
distributions from net
investment income and
realized gains from security
transactions 16,607 $ 244,620 17,697 $ 219,978
--------- ----------- ---------- --------------
458,138 $ 6,056,811 2,343,259 $ 32,396,633
Shares repurchased (1,764,370) $(23,136,065) (3,894,744) $(53,567,884)
---------- ------------ ---------- --------------
Net decrease (1,306,232) $(17,079,254) (1,551,485) $(21,171,251)
</table>
Note F-Repurchase Agreement
On a daily basis, the Fund invests any cash balances into repurchase agreements
hypothecated by U.S. Government obligations. Securities pledged as collateral
for repurchase agreements are held by the Fund's custodian bank until maturity
of the repurchase agreement. Provisions of the agreement ensure that the market
value of the collateral is suf.cient in the event of default. However, in the
event of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings.
Note G-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 December 31, 2003, the Fund had unused lines of credit amounting to
$8,167,518. 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
year ended December 31, 2003:
Average amount outstanding (total of daily outstanding principal
balancesdivided by number of days during the period) $14,625,967
Weighted average interest rate (actual interest expense on
short-term borrowing divided by average short-term borrowings
outstanding) 1.94%
Note H-Additional Tax Information
The tax character of distributions paid during the fiscal year ended
December 31, 2002 and 2003 were $251,524 and $279,662 respectively, and were
classified as ordinary income.
As of December 31, the components of accumulated earnings (losses) on a tax
basis were as follows:
2003
Capital loss carryforward $(17,181,351)
Unrealized gains (losses)-net 24,693,948
--------------
Total accumulated earnings (losses-net) $ 7,512,597
Capital loss carryforward year of expiration 2009-2011
At December 31, the Fund's aggregate security unrealized gains and losses based
on cost for U.S. federal income tax purposes was as follows:
2003
Tax cost $144,286,113
Gross unrealized gain 29,308,144
Gross unrealized loss (4,614,196)
Net unrealized security gain (loss) $ 24,693,948
Note I-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 December 31, 2003, the value of securities loaned and the value of
collateral was $10,302,513 and $10,669,999, respectively. During the year
ended December 31, 2003, income from securities lending amounted to $5,662.
The value of loaned securities and cash collateral at year end are disclosed
on the Fund's statement of assets and liabilities.
Report of Ernst & Young Independent Auditors
To the Board of Trustees and Shareholders of Northeast Investors Growth Fund:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Northeast Investors Growth Fund
(the "Fund") as of December 31, 2003, and the related statement of
operations, changes in net assets and financial highlights for the year then
ended. 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 audit. The statement of changes in net assets for the year ended
December 31, 2002 and the financial highlights for each of the four years
in the period then ended were audited by other auditors whose report,
dated February 14, 2003, expressed an unqualified opinion on those
financial statements and financial highlights.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. 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 confirmation of securities
owned as of December 31, 2003, by correspondence with the custodian
and brokers. 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
audit provides a reasonable basis for our opinion.
In our opinion, the .nancial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Northeast Investors Growth Fund at December 31, 2003, the results of its
operations, the changes in its net assets and financial highlights for the
year then ended, in conformity with accounting principles generally
accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
February 9, 2004
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 23 years Trustee and
150 Federal Street Trustee President of
Boston, MA Northeast Investors
Age 61 Growth Fund
Ernest E. Monrad Trustee 23 years Trustee of the Century Shares
150 Federal 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 10 years Officer of the
150 Federal Street President and Northeast Investors
Boston, MA Chief Financial Growth Fund,
Age 47 Officer Northeast Investors
Trust, Northeast
Investment
Management, Inc.
Robert B. Minturn Trustee, Clerk, 23 years Clerk and Trustee Northeast Investors
150 Federal Street and Vice of the Northeast Trust
Boston, MA President Investors Trust
Age 64
INDEPENDENT TRUSTEES
John C. Emery Trustee 23 years Partner, Law Firm
One Post Office Square of Sullivan &
Boston, MA Worcester
Age 73
Michael Baldwin Trustee 4 years Partner, Baldwin
3 Barnabas Road Brothers, Inc.
Marion, MA
Age 63
(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 & CFO
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.
150 Federal Street
Boston, Massachusetts 02110
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
150 Federal Street
Boston, Massachusetts 02110
Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116-5072
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
150 Federal Street
Boston, Massachusetts 02110
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.
As of the end of the period, December 31, 2003, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer and
principal financial officer. A copy of the code of ethics is filed as Exhibit
10(a)(1) to this Form N- CSR. The registrant has not made any amendment to its
code of ethics during the covered period. The registrant has not granted any
waivers from any provisions of the code of ethics during the covered period.
Item 3. Audit Committee Financial Expert.
The registrant does not have an Audit Committee Financial Expert. Although
the members of the registrant's Audit Committee have a variety of business
and investment experience, none of them has been determined to meet the
technical qualifications required in order to meet the definition of an Audit
Committee Financial Expert under this Item. Certain of the registrant's
directors who are considered to be "interested persons" as defined in
Section 2(a)(19) under the Investment Company of 1940, as amended, do
possess such qualifications, but it has been determined that the Audit
Committee should consist entirely of independent directors. The Audit
Committee, under its charter, has the ability to retain independent advisers
if it deems it necessary or appropriate without the need to seek approval from
the Board of Directors.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal
years (the "Reporting Periods") for professional services rendered by the
registrant's principal accountant (the "Auditor") for the audit of the
registrant's annual financial statements, or services that are normally
provided by the Auditor in connection with the statutory and regulatory filings
or engagements for the Reporting Periods, were $34,750 in 2002 and
$74,500 in 2003.
(b) Audit-Related Fees. No fees were billed for each of the last two fiscal
years for assurance and related services by the Auditor that are reasonably
related to the performance of the audit of the registrant's financial
statements other than as set forth in Item 4(a).
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for
professional services rendered by the Auditor to the registrant for tax
compliance, tax advice and tax planning ("Tax Services") were $4,000 in
2002 and $5,000 in 2003. These services consisted of preparing the
registrant's Federal income and excise tax returns.
All of such Tax Services rendered by the Auditor to the registrant in fiscal
2003 required pre-approval by the Audit Committee. Such services were not
required to be pre-approved by the Audit Committee in fiscal 2002.
(d) All Other Fees. No fees were billed for products and services provided
by the Auditor in 2002, other than services reported in (a) through (c) of this
Item. In 2003, the Auditor provided services relating to a review of the Fund's
anti-money laundering policies and procedures, for which fees billed were
$4,500.
There were no fees paid in the last two fiscal years to the Auditor for
products and services rendered by the Auditor to the registrant's investment
adviser and any entity controlling, controlled by or under common control with
the investment adviser that provides ongoing services to the registrant.
(e) Audit Committee Pre-Approval Policies and Procedures. (1) The
registrant's Audit Committee has established policies and procedures for
pre-approval of the Auditor's services to the registrant. Audit services
provided to the registrant require specific pre-approval by the Audit Committee.
Pre-approval considerations for audit services include the fees and other
compensation to be paid to the Auditor and whether the proposed services are
compatible with maintaining the Auditor's independence. In addition, the Audit
Committee must pre-approve any non-audit services to be provided by the Auditor.
Pre-approval considerations for such non-audit services include, among other
things, the fees and other compensation to be paid to the Auditor and whether
the engagement relates directly to the operations and financial reporting of the
registrant.
(2) None of the services provided to the registrant described in paragraph (c)
of Item 4 were provided under a pre-approval waiver procedure pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. All such services were
pre-approved by the Audit Committee for fiscal 2003. Such services were not
required to be pre-approved by the Audit Committee in fiscal 2002.
(f) No disclosures are required by this Item 4(f).
(g) Non-Audit Fees. No non-audit fees were billed by the Auditor for services
related to the registrant, and rendered to the registrant's investment adviser,
and any entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant, for the
last two fiscal years.
(h) Auditor Independence. The registrant's Audit Committee would consider
whether the provision of non-audit services that were rendered to the
registrant's investment adviser, and any entity controlling, controlled by, or
under common control with the investment adviser that provides ongoing services
to the registrant which were not pre-approved (not requiring pre-approval)
would be compatible with maintaining the Auditor's independence; no such
services were provided in fiscal 2002 and 2003.
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) 99.CODE ETH. Code of Ethics referred to in Item 2.
(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.
June, 2003
NORTHEAST INVESTORS GROWTH FUND
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. Covered Officers/Purpose of the Code
This code of ethics (this "Code") of Northeast Investors Growth Fund
the "Fund") applies to the Fund's Principal Executive Officer, Principal
Financial Officer and Principal Accounting Officer (the "Covered Officers" each
of whom are set forth in Exhibit A) for the purpose of promoting:
o honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o full, fair, accurate, timely and understandable disclosure in reports
and documents that the Fund files with, or submits to, the Securities and
Exchange Commission ("SEC") and in other public communications made by the
Fund;
o compliance with applicable laws and governmental rules and
regulations;
o the prompt internal reporting of violations of the Code to the Fund's
Compliance Officer, Richard J. Semple; and
o accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest.
II. Covered Officers Should Handle Ethically Actual and Apparent
Conflicts of Interest
Overview. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his service to, the Fund.
For example, a conflict of interest would arise if a Covered Officer, or a
member of his family, receives improper personal benefits as a result of his
position with the Fund.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 ("Investment Company Act")
and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For
example, Covered Officers may not individually engage in certain transactions
(such as the purchase or sale of securities or other property) with the Fund
because of their status as "affiliated persons" of the Fund. The Fund's
compliance procedures are designed to prevent, or identify and correct,
violations of these provisions. This Code does not, and is not intended to,
repeat or replace these procedures, and such conflicts fall outside of the
parameters of this Code.
Although typically not presenting an opportunity for improper
personal benefit, conflicts arise from, or as a result of, the contractual
relationship between the Fund and its investment adviser, of which the Covered
Officers may also be officers or employees. As a result, this Code recognizes
that the Covered Officers will, in the normal course of their duties (whether
formally for the Fund or for the adviser, or for both), be involved in
establishing policies and implementing decisions that will have different
effects on the adviser and the Fund. The participation of the Covered Officers
in such activities is inherent in the contractual relationship between the Fund
and the adviser and is consistent with the performance by the Covered Officers
of their duties as officers of the Fund. Thus, if performed in conformity with
the provisions of the Investment Company Act and the Investment Advisers Act,
such activities will be deemed to have been handled ethically. In addition, it
is recognized that the Covered Officers may also be officers or employees of
one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions in the Investment Company
Act and the Investment Advisers Act. The following list provides examples of
conflicts of interest under the Code, but Covered Officers should keep in mind
that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Officer should not be placed improperly before
the interest of the Fund.
* * * *
Each Covered Officer must:
o not use his personal influence or personal relationships improperly to
influence investment decisions or financial reporting by the Fund whereby the
Covered Officer would benefit personally to the detriment of the Fund;
o not cause the Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the benefit the
Fund;
o not use material non-public knowledge of portfolio transactions made
or contemplated for the Fund to trade personally or cause others to trade
personally in contemplation of the market effect of such transactions;
There are some conflict of interest situations that may be discussed
with the Fund's Compliance Officer, if material. Examples of these include:
o service as a director on the board of any public company;
o the receipt of any entertainment from any company with which the Fund
has current or prospective business dealings unless such entertainment is
business-related, reasonable in cost, appropriate as to time and place, and not
so frequent as to raise any question of impropriety;
o any ownership interest in, or any consulting or employment
relationship with, any of the Fund's service providers, other than its
investment adviser or any affiliated person thereof;
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Fund for effecting portfolio transactions or
for selling or redeeming shares other than an interest arising from the Covered
Officer's employment, such as compensation or equity ownership.
III. Disclosure and Compliance
o Each Covered Officer should familiarize himself with the disclosure
requirements generally applicable to the Fund;
o each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Fund to others, whether within or
outside the Fund, including to the Fund's trustees and auditors, and to
governmental regulators and self-regulatory organizations;
o each Covered Officer should, to the extent appropriate within his area
of responsibility, consult with other officers and employees of the Fund and
the adviser with the goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the Fund files with, or
submits to, the SEC and in other public communications made by the Fund; and
o it is the responsibility of each Covered Officer to promote compliance
with the standards and restrictions imposed by applicable laws, rules and
regulations.
IV. Reporting and Accountability
Each Covered Officer must:
o upon adoption of the Code (or thereafter as applicable, upon becoming
a Covered Officer), affirm in writing that he has received, read, and
understands the Code;
o not retaliate against any other Covered Officer or any employee of the
Fund or their affiliated persons for reports of potential violations that are
made in good faith; and
o notify the Compliance Officer promptly if he knows of any violation of
this Code. Failure to do so is itself a violation of this Code.
The Compliance Officer is responsible for applying this Code to
specific situations in which questions are presented under it and has the
authority to interpret this Code in any particular situation. However, any
approvals or waivers sought by the Principal Executive Officer will be
considered by the Fund's Board of Trustees (the "Board").
The Fund will follow these procedures in investigating and enforcing
this Code:
o the Compliance Officer will take all appropriate action to investigate
any potential violations reported to him;
o if, after such investigation, the Compliance Officer believes that no
violation has occurred, the Compliance Officer is not required to take any
further action;
o any matter that the Compliance Officer believes is a violation will be
reported to the Board;
o if the Board concurs that a violation has occurred, it will consider
appropriate action, which may include review of, and appropriate modifications
to, applicable policies and procedures; notification to appropriate personnel
of the investment adviser or its board; or a recommendation to dismiss or
otherwise discipline the Covered Officer; and
o any changes to or waivers of this Code will, to the extent required,
be disclosed as provided by SEC rules.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Fund for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Fund, or the Fund's adviser, govern or purport to
govern the behavior or activities of the Covered Officers who are subject to
this Code, they are superseded by this Code to the extent that they overlap or
conflict with the provisions of this Code. The Fund's and its investment
adviser's codes of ethics under Rule 17j-1 under the Investment Company Act
are separate requirements applying to the Covered Officers and others, and are
not part of this Code.
VI. Amendments
Any amendments to this Code, other than amendments to Exhibit A, must
be approved or ratified by a majority vote of the Board, including a majority
of independent trustees.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone other than the Board, the Fund, its adviser
and counsel to any of them.
VIII. Internal Use
The Code is intended solely for the internal use by the Fund and does
not constitute an admission, by or on behalf of the Fund, as to any fact,
circumstance, or legal conclusion.
Date: March 5, 2004
Exhibit A
Persons Covered by this Code of Ethics for Principal Executive and Senior
Financial Officers.
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: March 5, 2004
By (Signature and Title)
Gordon C. Barrett
Treasurer
(principal financial officer)
Date: March 5, 2004
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: March 5, 2004
By (Signature and Title)
Gordon C. Barrett
Treasurer
(principal financial officer)
Date: March 5, 2004
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) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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: March 5, 2004 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) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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: March 5, 2004
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 December 31, 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: March 5, 2004
William A. Oates, Jr.
President
(Principal Executive Officer)
Dated: March 5, 2004
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.