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 811-3762
Smith Barney Aggressive Growth Fund Inc.
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Christina T. Sydor, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 451-2010
Date of fiscal year end: August 31
Date of reporting period: August 31, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
SMITH BARNEY
AGGRESSIVE GROWTH
FUND INC.
CLASSIC SERIES | ANNUAL REPORT | AUGUST 31, 2003
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed./R/
Your Serious Money. Professionally Managed./R/ is a registered service
mark of Citigroup Global Markets Inc.
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
[PHOTO OF RICHIE FREEMAN]
RICHIE FREEMAN
PORTFOLIO MANAGER
Classic Series
[GRAPHIC]
Annual Report . August 31, 2003
SMITH BARNEY
AGGRESSIVE GROWTH FUND
RICHIE FREEMAN
Richie Freeman has more than 28 years of securities business experience
and has been managing the Fund since its inception in 1983.
Education: BS from Brooklyn College, MBA from New York University
FUND OBJECTIVE
The Fund seeks capital appreciation. It seeks to achieve this objective
by investing primarily in common stocks of companies that the manager
believes are experiencing, or will experience, growth in earnings that
exceeds the average rate of earnings growth of the companies which
comprise the S&P 500 Index.
FUND FACTS
FUND INCEPTION
-----------------
October 24, 1983
MANAGER INVESTMENT INDUSTRY EXPERIENCE
-----------------
28 Years
What's Inside
Letter from the Chairman.............................................. 1
Manager Overview...................................................... 2
Fund Performance...................................................... 4
Historical Performance................................................ 5
Schedule of Investments............................................... 6
Statement of Assets and Liabilities................................... 9
Statement of Operations............................................... 10
Statements of Changes in Net Assets................................... 11
Notes to Financial Statements......................................... 12
Financial Highlights.................................................. 16
Independent Auditors' Report.......................................... 18
Additional Information................................................ 19
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken, CFA
Chairman, President and
Chief Executive Officer
Dear Shareholder,
There are few traits as revered in American culture as longevity and
consistency. I recall the national outpouring of affection a few years ago for
Baltimore's Cal Ripken when he broke Yankee great Lou Gehrig's "unsurpassable"
mark of 2,130 consecutive baseball games played. We seem in awe of people who
get the job done well, day in and day out, year after year.
In October, the Smith Barney Aggressive Growth Fund Inc. ("Fund") will
celebrate its 20th anniversary. Since its birth on October 24, 1983, it has
been skippered by Richie Freeman. In the grand scheme of things, two decades
might not seem like such a long time. But consider: Today, the average tenure
of large-cap growth managers is less than five years. As Barron's stated
recently, Richie is, "the don of the large-cap growth category."
From the beginning, Richie has never wavered from the original philosophy
behind the Fund. In his words: "To design a true growth portfolio, I believe in
investing in companies not just for a quarter or two but for five years, ten
years, and even longer. If I've made wise choices, these companies will
compound their earnings growth over time for the portfolio, providing much
better results than a rapid trading strategy. As the old adage goes, 'The real
money is made in the sitting, not in the trading.' " While the average fund in
Morningstar's large-cap growth fund category turns over its portfolio at an
annual rate of 147%, the Aggressive Growth Fund's turnover is only 1%./1/
The Fund has adhered to that buy-and-hold philosophy even during difficult
years, such as 1996 and 2002, when the doubting Thomases questioned its
validity. Over the years, investment fads have come and gone and asset styles
have gone in and out of favor. The Aggressive Growth Fund has kept its focus on
building a pure growth portfolio and giving it time to bear fruit, ever mindful
that it is your money that is in our care. Rest assured, that focus will not
diminish.
Working alongside Richie as I have for some 15 years, I am sure he is blushing
at these words. Given his choice, he would probably have chosen remarks akin to
those of Yogi Berra upon a similar occasion, "Thank you for making this day
necessary."
Thank you for entrusting your assets to the Smith Barney Aggressive Growth Fund
Inc. We look forward to helping you continue to meet your long-term financial
goals in the coming years and decades.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
September 15, 2003
/1/ Turnover is a measure of a fund's trading activity during its previous
fiscal year, expressed as a percentage of its average total assets. A
turnover ratio of 100% or more does not necessarily suggest that all
securities in the portfolio have been traded. In practical terms, the
resulting percentage loosely represents the percentage of the portfolio's
holdings that have changed over the past year. There is no assurance that a
fund will maintain its current level of turnover.
1 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
MANAGER OVERVIEW
Performance Review
For the 12 months ended August 31, 2003, Class A shares of the Fund, without
sales charges, returned 25.90%. These shares performed better than the Fund's
unmanaged benchmark, the Russell 3000 Growth Index,/i/ which returned 15.38%
for the same period. They also outperformed the average of the Fund's Lipper
peer group of multi-cap growth funds, which returned 21.07% for the same
period./1/
The strength in the Fund was broadly based, with particularly good performance
demonstrated by holdings in the healthcare and financial services sectors
including Genzyme Corp., Amgen Inc., Merrill Lynch & Co., Inc. and Lehman
Brothers Holdings, Inc.
Market Overview
Rarely does history repeat itself in the stock market, yet there are remarkable
similarities between the performance of stocks before and after the Iraq
confrontations in 1991 and 2003. In both cases, the equity markets declined
prior to the onset of armed conflict, related at least in part to a sharp rise
in the price of crude oil. Traders feared a possible disruption to energy
supplies during the fighting. When it became evident, in both instances, that
the United States would prove victorious with little to no disruption to energy
supplies, the stock market staged a strong rally and the price of oil declined.
The U.S. economy was in recession prior to the conflict in 1991, aggravated by
the surge in energy prices following Iraq's occupation of Kuwait. In early
2003, while no longer officially in recession, the U.S. economy was quite weak,
having never fully recovered from the terrorist strikes in 2001 and effects of
the unwinding of the speculative stock market bubble of the late 1990's. In
both cases, the quick victories in Iraq led to pickups in the U.S. economy and
in equity prices.
While some will call March the start of the 2003 stock market rally, we wrote
in the last shareholder report in February that its seeds were sown in the
summer of 2002.
"Importantly, while the market averages made little forward progress in the
months since the July lows, some market indicators have improved and we
detect a strengthening in its underlying technical condition. For example,
fewer stocks recorded new 52-week-lows at the October 2002 trough than were
seen in July, and fewer still recorded new lows on the most recent decline.
We also believe that the public's sentiment towards equities has gotten
progressively more pessimistic and that this negativity has been reflected in
the near record levels of bearish sentiment as measured by various weekly
surveys. From a contrarian standpoint, this increase in bearish sentiment and
investor skepticism is actually good news in that it reflects actions already
taken by investors."
The Federal Reserve Board has remained extremely accommodative having cut
short-term interest rates 13 times since 2000. It has also indicated to the
markets that it intends to keep short-term rates low for an extended period of
time as an insurance policy that economic growth will not just resume, but will
be sustained. Long-term interest rates rose sharply during the summer following
a plunge to the lowest levels seen in two generations. The steepening of the
yield curve/ii/ is a typical consequence of an improving tone in the economy.
/1/ Lipper is a major independent mutual-fund tracking organization. Average
annual returns are based on the 12-month period ended August 31, 2003,
calculated among 384 funds in the multi-cap growth funds category with
reinvestment of dividends and capital gains excluding sales charges.
2 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
Portfolio Update
Following weak performance into the July 2002 lows, biotechnology and other
healthcare securities staged strong recoveries and were contributors to the
Fund's performance. One notable stock, which was a significant positive
contributor to the Fund's results was ImClone Systems Inc., the biotechnology
company better known for the much-publicized transgressions of its former
management team than for the potential of its experimental drug, Erbitux. After
having taken profits in the shares in late 2001, we added to the Fund's
position early this year, with the belief that the tumor fighting activity of
its oncology compound was significant and was not being reflected in its share
price. The biotechnology sector generally performed well in the most recent
year, as many of its participants continued to generate strong earnings and
displayed progress in bringing new products through clinical trials to
commercialization.
In the six months ending in September, IGEN International, Inc., a diagnostics
firm, accepted a merger offer from Roche. We took partial profits in IGEN's
shares following the announcement. In the financial sector, an accommodative
Fed, combined with a recovery in the equity market, helped improve the earnings
and stock prices of Merrill Lynch and Lehman Brothers. Also, in the last six
months, two of the Fund's financial holdings accepted merger offers. Lehman
Brothers offered to acquire Neuberger Berman Inc., the New York-based money
management firm, and New York Community Bancorp offered to acquire Roslyn
Bancorp, Inc., the Long Island, New York-based thrift.
Two securities that detracted from results in the past year were IDEC
Pharmaceuticals Corp. and Micron Technology, Inc. In July, IDEC announced a
merger agreement with Biogen Inc., which will create the world's third largest
independent biotechnology company. Investor reaction to the deal, at least
initially, has been tepid. We see very good potential for the combined company
to generate significant value through their existing marketed drugs and for
Biogen's novel compound for multiple sclerosis, which is in late-stage trials.
Micron underperformed because of weakness in the price of computer memory
chips. In recent months we have seen a pickup in the company's business related
to strength in the personal computer market.
In this, our 20th Anniversary Year for the Smith Barney Aggressive Growth Fund
Inc., we would like to thank you, the shareholders, for the confidence you have
shown in allowing us to manage your investment. We take this responsibility
quite seriously and will continue to strive for excellence in helping you to
achieve your investment objectives.
Sincerely,
/s/ Richard A. Freeman
Richard A. Freeman
Vice President and Investment Officer
September 19, 2003
The information provided in this letter by the Manager is not intended to be a
forecast of future events, a guarantee of future results or investment advice.
Views expressed may differ from those of the firm as a whole.
Portfolio holdings and breakdowns are as of August 31, 2003 and are subject to
change. Please refer to pages 6 through 8 for a list and percentage breakdown
of the Fund's holdings.
/i/ Russell 3000 Growth Index measures the performance of those Russell 3000
companies with higher price-to-book ratios and higher forecasted growth
values. Please note that an investor cannot invest directly in an index.
/ii/ The yield curve is the graphical depiction of the relationship between the
yield on bonds of the same credit quality but different maturities.
3 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
------------------------------
Class A Class B Class L Class Y
- -------------------------------------------------------------------
Twelve Months Ended 8/31/03 25.90% 24.90% 24.98% 26.42%
- -------------------------------------------------------------------
Five Years Ended 8/31/03 19.04 18.08 18.14 19.47
- -------------------------------------------------------------------
Ten Years Ended 8/31/03 15.40 14.49 14.54 N/A
- -------------------------------------------------------------------
Inception* through 8/31/03 14.23 14.73 15.25 14.47++
- ------------------------------------------------------------------
With Sales Charges/(2)/
------------------------------
Class A Class B Class L Class Y
- -------------------------------------------------------------------
Twelve Months Ended 8/31/03 19.60% 19.90% 22.74% 26.42%
- -------------------------------------------------------------------
Five Years Ended 8/31/03 17.82 17.97 17.90 19.47
- -------------------------------------------------------------------
Ten Years Ended 8/31/03 14.81 14.49 14.42 N/A
- -------------------------------------------------------------------
Inception* through 8/31/03 13.93 14.73 15.14 14.47++
- ------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
- -------------------------------------------------------------------------------
Class A (8/31/93 through 8/31/03) 318.92%
- -------------------------------------------------------------------------------
Class B (8/31/93 through 8/31/03) 286.85
- -------------------------------------------------------------------------------
Class L (8/31/93 through 8/31/03) 288.55
- -------------------------------------------------------------------------------
Class Y (Inception* through 8/31/03) 178.74++
- -------------------------------------------------------------------------------
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to Class
B and L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase payment.
Thereafter, this CDSC declines by 1.00% per year until no CDSC is incurred.
Class L shares also reflect the deduction of a 1.00% CDSC, which applies if
shares are redeemed within one year from purchase payment.
+ The returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
* Inception dates for Class A, B, L and Y shares are October 24, 1983,
November 6, 1992, May 13, 1993 and October 12, 1995, respectively.
++ Performance calculations for Class Y shares use January 31, 1996 as the
inception date since all Class Y shares were redeemed during November 1995
and new shares in Class Y were not purchased until January 31, 1996.
4 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Class A Shares of the Smith Barney Aggressive
Growth Fund Inc. vs. Russell 3000 Growth Index+
- --------------------------------------------------------------------------------
August 1993 -- August 2003
[CHART]
Smith Barney
Aggressive
Growth Fund Inc. - Russell 3000
Class A Shares Growth Index
------------------ --------------
Aug 1993 $ 9,501 $10,000
Aug 1994 10,777 10,625
Aug 1995 14,221 13,262
Aug 1996 13,163 15,570
Aug 1997 19,628 21,401
Aug 1998 16,653 22,396
Aug 1999 34,042 33,139
Aug 2000 56,139 44,360
Aug 2001 46,454 24,571
Aug 2002 31,612 19,065
Aug 2003 39,800 21,997
+ Hypothetical illustration of $10,000 invested in Class A shares on August
31, 1993, assuming deduction of the maximum 5.00% sales charge at the time
of investment and reinvestment of dividends and capital gains, if any, at
net asset value through August 31, 2003. The Russell 3000 Growth Index
measures the performance of those Russell 3000 Index companies with higher
price-to-book ratios and higher forecasted growth values. The Index is
unmanaged and is not subject to the same management and trading expenses as
a mutual fund. Please note that an investor cannot invest directly in an
index. The performance of the Fund's other classes may be greater or less
than the Class A shares' performance indicated on this chart, depending on
whether greater or lesser sales charges and fees were incurred by
shareholders investing in the other classes. The returns shown do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
All figures represent past performance and are not a guarantee of future
results. The performance data represents past performance including the
investment return and principal value of an investment, which will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.
5 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
SCHEDULE OF INVESTMENTS AUGUST 31, 2003
SHARES SECURITY VALUE
- ------------------------------------------------------------
COMMON STOCK -- 93.9%
Aerospace & Defense -- 1.9%
2,500,000 L-3 Communications Holdings, Inc.* $ 127,725,000
- ------------------------------------------------------------
Banks -- 2.3%
3,000,000 Astoria Financial Corp. 96,420,000
2,330,000 Roslyn Bancorp, Inc. 53,566,700
- ------------------------------------------------------------
149,986,700
- ------------------------------------------------------------
Biotechnology -- 21.9%
200,000 Albany Molecular Research, Inc.* 3,068,000
1,550,000 Alkermes, Inc.* 17,840,500
5,700,000 Amgen Inc.* 375,630,000
599,500 AP Pharma, Inc.* 1,073,105
6,800,000 Chiron Corp.* 345,576,000
266,000 Genentech, Inc.* 21,120,400
5,736,811 Genzyme Corp.* 270,490,639
4,800,000 IDEC Pharmaceuticals Corp.* 166,800,000
2,881,450 ImClone Systems Inc.* 121,107,343
1,050,000 Isis Pharmaceuticals, Inc.* 6,951,000
6,040,000 Millennium Pharmaceuticals, Inc.* 83,956,000
880,000 Nabi Biopharmaceuticals 5,640,800
750,000 Nanogen, Inc.* 2,565,000
200,000 Tularik Inc.* 2,026,000
1,900,000 Vertex Pharmaceuticals Inc.* 23,940,000
- ------------------------------------------------------------
1,447,784,787
- ------------------------------------------------------------
Commingled Fund -- 2.0%
4,000,000 Nasdaq-100 Index Tracking Stock* 133,560,000
- ------------------------------------------------------------
Communications Equipment -- 2.4%
3,000,000 C-COR.net Corp.* 16,320,000
7,500,000 Motorola, Inc. 80,475,000
675,072 Nokia Oyj 11,011,452
2,924,928 Nokia Oyj, Sponsored ADR 47,647,077
- ------------------------------------------------------------
155,453,529
- ------------------------------------------------------------
Computers & Peripherals -- 2.8%
350,000 Drexler Technology Corp.* 6,377,000
8,595,000 Maxtor Corp.* 98,240,850
6,150,000 Quantum Corp.* 18,573,000
1,000,000 SanDisk Corp.* 60,460,000
- ------------------------------------------------------------
183,650,850
- ------------------------------------------------------------
Diversified Financials -- 11.3%
897,100 CIT Group Inc. 24,445,975
30,000 The Goldman Sachs Group, Inc. 2,654,700
5,000,000 Lehman Brothers Holdings, Inc. 328,650,000
4,400,000 Merrill Lynch & Co., Inc. 236,632,000
3,668,000 Neuberger Berman Inc. 152,075,280
- ------------------------------------------------------------
744,457,955
- ------------------------------------------------------------
Diversified Telecommunication Services -- 0.3%
800,000 AT&T Corp. 17,840,000
- ------------------------------------------------------------
See Notes to Financial Statements.
6 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
SCHEDULE OF INVESTMENTS (CONTINUED) AUGUST 31, 2003
SHARES SECURITY VALUE
- ---------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.3%
689,000 Excel Technology, Inc.* $ 18,789,030
- ---------------------------------------------------------------------------
Energy Equipment & Services -- 4.8%
1,447,500 Core Laboratories N.V.* 19,324,125
5,099,700 Grant Prideco, Inc.* 59,156,520
6,400,000 Weatherford International Ltd.* 240,512,000
- ---------------------------------------------------------------------------
318,992,645
- ---------------------------------------------------------------------------
Healthcare Equipment & Supplies -- 0.9%
964,400 Biosite Inc. 44,748,160
1,815,000 Cygnus, Inc.* 889,350
87,500 Cytyc Corp.* 1,144,500
200,000 IGEN International, Inc.* 11,672,000
- ---------------------------------------------------------------------------
58,454,010
- ---------------------------------------------------------------------------
Healthcare Providers & Services -- 7.5%
10,000,000 UnitedHealth Group Inc. 494,300,000
- ---------------------------------------------------------------------------
Industrial Conglomerates -- 2.8%
9,025,000 Tyco International Ltd. 185,734,500
- ---------------------------------------------------------------------------
Machinery -- 0.1%
209,100 Pall Corp. 5,227,500
- ---------------------------------------------------------------------------
Media -- 13.1%
10,600,000 AOL Time Warner Inc.*+ 173,416,000
7,850,000 Cablevision Systems -- NY Group, Class A Shares* 158,177,500
1,394,000 Comcast Corp., Class A Shares* 41,471,500
7,900,000 Comcast Corp., Special Class A Shares* 224,044,000
14,550,000 Liberty Media Corp., Class A Shares* 176,055,000
200,000 Source Interlink Cos., Inc.* 1,584,000
1,736,000 Viacom Inc., Class B Shares 78,120,000
1,100,000 World Wrestling Entertainment, Inc. 11,110,000
- ---------------------------------------------------------------------------
863,978,000
- ---------------------------------------------------------------------------
Pharmaceuticals -- 10.3%
8,000,000 Forest Laboratories, Inc.* 376,000,000
3,600,000 ICN Pharmaceuticals, Inc. 63,000,000
2,156,000 Johnson & Johnson 106,894,480
5,150,000 King Pharmaceuticals, Inc.* 72,357,500
768,303 Pfizer Inc. 22,987,626
2,100,000 SICOR Inc.* 41,685,000
- ---------------------------------------------------------------------------
682,924,606
- ---------------------------------------------------------------------------
Semiconductor Equipment & Products -- 6.4%
1,050,000 Cabot Microelectronics Corp.* 68,449,500
3,720,000 Cirrus Logic, Inc.* 20,906,400
1,000,000 Cree, Inc.* 15,820,000
1,170,000 DSP Group, Inc.* 31,847,400
3,280,000 Intel Corp. 93,873,600
7,200,000 Micron Technology, Inc.* 103,392,000
4,000,000 RF Micro Devices, Inc.* 35,280,000
630,000 Standard Microsystems Corp.* 12,644,100
2,103,640 Teradyne, Inc.* 37,507,901
- ---------------------------------------------------------------------------
419,720,901
- ---------------------------------------------------------------------------
See Notes to Financial Statements.
7 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
SCHEDULE OF INVESTMENTS (CONTINUED) AUGUST 31, 2003
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------------------------------------
Software -- 1.0%
1,100,000 Advent Software, Inc.* $ 18,590,000
675,000 Autodesk, Inc. 12,082,500
680,800 Microsoft Corp. 18,054,816
785,500 RSA Security Inc.* 9,488,840
650,000 Verity, Inc.* 7,748,000
- -----------------------------------------------------------------------------------------------------------------------
65,964,156
- -----------------------------------------------------------------------------------------------------------------------
Specialty Retail -- 0.0%
431,000 Charming Shoppes, Inc.* 2,586,000
- -----------------------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.8%
13,800,000 AT&T Wireless Services Inc.* 118,956,000
- -----------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $5,508,424,442) 6,196,086,169
- -----------------------------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- -----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 6.1%
$404,444,000 UBS PaineWebber Inc., 1.000% due 9/2/03; Proceeds at maturity -- $404,488,938; (Fully
collateralized by U.S. Treasury Notes and Bonds, 1.500% to 4.375% due 5/31/04 to 8/15/13;
Market value -- $412,533,539) (Cost -- $404,444,000) 404,444,000
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $5,912,868,442**) $6,600,530,169
- -----------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
+ Subsequent to the reporting period, the company changed its name to Time
Warner Inc.
** Aggregate cost for Federal income tax purposes is $5,913,193,541.
See Notes to Financial Statements.
8 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2003
ASSETS:
Investments, at value (Cost -- $5,912,868,442) $6,600,530,169
Cash 20
Receivable for Fund shares sold 17,635,254
Dividends and interest receivable 2,096,149
Receivable for securities sold 1,895,293
- -----------------------------------------------------------------------------
Total Assets 6,622,156,885
- -----------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 5,053,392
Payable for Fund shares reacquired 3,895,218
Investment advisory fee payable 3,246,141
Administration fee payable 1,082,047
Distribution plan fees payable 1,074,063
Accrued expenses 870,278
- -----------------------------------------------------------------------------
Total Liabilities 15,221,139
- -----------------------------------------------------------------------------
Total Net Assets $6,606,935,746
- -----------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 881,032
Capital paid in excess of par value 6,015,467,177
Accumulated net realized loss from investment transactions (97,074,190)
Net unrealized appreciation of investments 687,661,727
- -----------------------------------------------------------------------------
Total Net Assets $6,606,935,746
- -----------------------------------------------------------------------------
Shares Outstanding:
Class A 29,751,409
- ------------------------------------------------------------------------------
Class B 27,779,973
- ------------------------------------------------------------------------------
Class L 19,708,761
- ------------------------------------------------------------------------------
Class Y 10,863,093
- ------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $78.36
- ------------------------------------------------------------------------------
Class B * $71.43
- ------------------------------------------------------------------------------
Class L * $71.79
- ------------------------------------------------------------------------------
Class Y (and redemption price) $80.67
- ------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per
share) $82.48
- ------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per
share) $72.52
- -----------------------------------------------------------------------------
* Redemption price is NAV of Class B and L shares reduced by a 5.00% and 1.00%
CDSC, respectively, if shares are redeemed within one year from purchase
payment (See Note 2).
See Notes to Financial Statements.
9 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2003
INVESTMENT INCOME:
Dividends $ 17,916,332
Interest 1,464,550
Less: Foreign withholding tax (163,732)
- -----------------------------------------------------------------------------
Total Investment Income 19,217,150
- -----------------------------------------------------------------------------
EXPENSES:
Distribution plan fees (Note 5) 32,914,173
Investment advisory fee (Note 2) 31,937,600
Administration fee (Note 2) 10,645,867
Shareholder servicing fees (Note 5) 8,086,347
Shareholder communications (Note 5) 301,128
Custody 251,469
Registration fees 111,881
Audit and legal 83,537
Directors' fees 52,505
Other 54,482
- -----------------------------------------------------------------------------
Total Expenses 84,438,989
- -----------------------------------------------------------------------------
Net Investment Loss (65,221,839)
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES (NOTE 3):
Realized Gain (Loss) From:
Investment transactions (41,274,552)
Foreign currency transactions 6,426
- -----------------------------------------------------------------------------
Net Realized Loss (41,268,126)
- -----------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of
Investments:
Beginning of year (675,592,107)
End of year 687,661,727
- -----------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 1,363,253,834
- -----------------------------------------------------------------------------
Net Gain on Investments 1,321,985,708
- -----------------------------------------------------------------------------
Increase in Net Assets From Operations $1,256,763,869
- -----------------------------------------------------------------------------
See Notes to Financial Statements.
10 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED AUGUST 31,
2003 2002
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (65,221,839) $ (74,127,377)
Net realized loss (41,268,126) (13,538,005)
Increase (decrease) in net unrealized
appreciation 1,363,253,834 (2,198,174,783)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Operations 1,256,763,869 (2,285,840,165)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 1,876,235,063 2,567,285,879
Cost of shares reacquired (1,290,220,871) (1,372,401,474)
- --------------------------------------------------------------------------------
Increase in Net Assets From Fund Share
Transactions 586,014,192 1,194,884,405
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 1,842,778,061 (1,090,955,760)
NET ASSETS:
Beginning of year 4,764,157,685 5,855,113,445
- --------------------------------------------------------------------------------
End of year* $ 6,606,935,746 $ 4,764,157,685
- --------------------------------------------------------------------------------
* Includes accumulated net investment loss of: -- $(3,199)
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
11 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Fund Inc. ("Fund"), a Maryland corporation,
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing price on such markets;
securities traded in the over-the-counter market and listed securities for
which no sales prices were reported are valued at the mean between the bid and
asked prices; securities listed on the NASDAQ National Market System for which
market quotations are available are valued at the official closing price or, if
there is no official closing price on that day, at the last sale price;
(c) securities for which market quotations are not available will be valued in
good faith at fair value by or under the direction of the Board of Directors;
(d) short-term obligations with maturities of 60 days or less are valued at
cost plus accreted discount, or minus amortized premium, which approximates
value; (e) dividend income is recorded on the ex-dividend date and interest
income is recorded on an accrual basis; (f ) gains or losses on the sale of
securities are calculated by using the specific identification method; ( g)
class specific expenses are charged to each class; investment advisory fees and
general fund expenses are allocated on the basis of relative net assets of each
class or on another reasonable basis; (h) dividends and distributions to
shareholders are recorded on the ex-dividend date; the Fund distributes
dividends and capital gains, if any, at least annually; (i) the Fund intends to
comply with the applicable provisions of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal
income and excise taxes; ( j) the accounting records of the Fund are maintained
in U.S. dollars. All assets and liabilities denominated in foreign currencies
are translated into U.S. dollars based on the rate of exchange of such
currencies against U.S. dollars on the date of valuation. Purchases and sales
of securities, and income and expenses are translated at the rate of exchange
quoted on the respective date that such transactions are recorded. Differences
between income and expense amounts recorded and collected or paid are adjusted
when reported by the custodian; ( k) the character of income and gains to be
distributed is determined in accordance with income tax regulations, which may
differ from accounting principles generally accepted in the United States of
America. At August 31, 2003, reclassifications were made to the Fund's capital
accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, a
portion of accumulated net investment loss amounting to $65,218,612 was
reclassified to paid-in capital. Net investment income, net realized gains and
net assets were not affected by this adjustment; and (l) estimates and
assumptions are required to be made regarding assets, liabilities and changes
in net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ.
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment adviser to the Fund. The
Fund pays SBFM an advisory fee calculated at an annual rate of 0.60% of the
Fund's average daily net assets. This fee is calculated daily and paid monthly.
SBFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the Fund's average daily net assets.
This fee is calculated daily and paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Fund's transfer agent. PFPC Global Fund Services ("PFPC") and Primerica
Shareholder Services ("PSS"), another subsidiary of Citigroup, act as the
Fund's sub-transfer agents. CTB receives account fees and asset-based fees that
vary according to the size and type of account. PFPC and PSS are responsible
for shareholder recordkeeping and financial processing for all shareholder
accounts and are paid by CTB. For the year ended August 31, 2003, the Fund paid
transfer agent fees of $10,670,476 to CTB.
12 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Citigroup Global Markets Inc. ("CGM"), formerly known as Salomon Smith Barney
Inc., and PFS Distributors, Inc., both of which are subsidiaries of Citigroup,
act as the Fund's distributors. For the year ended August 31, 2003, CGM and its
affiliates did not receive any brokerage commissions.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. There is a contingent deferred sales charge ("CDSC") of
5.00% on Class B shares, which applies if redemption occurs within one year
from purchase payment and declines thereafter by 1.00% per year until no CDSC
is incurred. Class L shares also have a 1.00% CDSC, which applies if redemption
occurs within one year from purchase payment. In certain cases, Class A shares
have a 1.00% CDSC, which applies if redemption occurs within one year from
purchase payment. This CDSC only applies to those purchases of Class A shares,
which, when combined with current holdings of Class A shares, equal or exceed
$1,000,000 in the aggregate. These purchases do not incur an initial sales
charge.
For the year ended August 31, 2003, CGM and its affiliates received sales
charges of approximately $8,436,000 and $1,952,000 on sales of the Fund's Class
A and L shares, respectively. In addition, for the year ended August 31, 2003,
CDSCs paid to CGM and its affiliates were approximately:
Class A Class B Class L
- ------------------------------------------------------------------------------
CDSCs $18,000 $4,565,000 $194,000
- ------------------------------------------------------------------------------
All officers and one Director of the Fund are employees of Citigroup or its
affiliates.
3. Investments
During the year ended August 31, 2003, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
- -----------------------------------------------------------------------------
Purchases $240,072,333
- -----------------------------------------------------------------------------
Sales 64,919,693
- -----------------------------------------------------------------------------
At August 31, 2003, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were as follows:
- ------------------------------------------------------------------------
Gross unrealized appreciation $ 2,132,274,971
Gross unrealized depreciation (1,444,938,343)
- ------------------------------------------------------------------------
Net unrealized appreciation $ 687,336,628
- ------------------------------------------------------------------------
4. Repurchase Agreements
The Fund purchases (and the custodian takes possession of ) U.S. government
securities from securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value (plus accrued interest) of the collateral in
amounts at least equal to the repurchase price.
13 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Class Specific Expenses
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
its Class A, B and L shares calculated at the annual rate of 0.25% of the
average daily net assets of each respective class. The Fund also pays a
distribution fee with respect to its Class B and L shares calculated at the
annual rate of 0.75% of the average daily net assets of each class. For the
year ended August 31, 2003, total Distribution Plan fees, which are accrued
daily and paid monthly, were as follows:
Class A Class B Class L
---------------------------------------------------------
Distribution Plan Fees $4,693,099 $16,623,807 $11,597,267
---------------------------------------------------------
For the year ended August 31, 2003, total Shareholder Servicing fees were as
follows:
Class A Class B Class L Class Y Class Z
---------------------------------------------------------------------------
Shareholder Servicing Fees $2,915,022 $3,530,810 $1,638,497 $235 $1,783
---------------------------------------------------------------------------
For the year ended August 31, 2003, total Shareholder Communication expenses
were as follows:
Class A Class B Class L Class Y Class Z
---------------------------------------------------------------------------
Shareholder Communication Expenses $90,940 $136,240 $72,498 $44 $1,406
---------------------------------------------------------------------------
6. Capital Shares
At August 31, 2003, the Fund had 100 million shares of capital stock authorized
with a par value of $0.01 per share. The Fund has the ability to issue multiple
classes of shares. Each share of a class represents an identical interest and
has the same rights, except that each class bears certain direct expenses,
including those specifically related to the distribution of its shares.
Transactions in shares of each class were as follows:
Year Ended Year Ended
August 31, 2003 August 31, 2002
------------------------- -------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class A
Shares sold 8,506,276 $ 582,034,110 10,671,514 $ 882,280,737
Shares reacquired (5,081,210) (341,718,810) (5,688,825) (432,856,514)
- -------------------------------------------------------------------------------
Net Increase 3,425,066 $ 240,315,300 4,982,689 $ 449,424,223
- -------------------------------------------------------------------------------
Class B
Shares sold 5,651,045 $ 355,363,778 10,232,684 $ 784,822,603
Shares reacquired (4,834,626) (291,969,173) (5,606,861) (390,872,960)
- -------------------------------------------------------------------------------
Net Increase 816,419 $ 63,394,605 4,625,823 $ 393,949,643
- -------------------------------------------------------------------------------
Class L
Shares sold 4,527,369 $ 289,298,922 7,571,927 $ 590,086,307
Shares reacquired (3,560,257) (215,242,394) (3,960,291) (274,777,079)
- -------------------------------------------------------------------------------
Net Increase 967,112 $ 74,056,528 3,611,636 $ 315,309,228
- -------------------------------------------------------------------------------
14 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year Ended Year Ended
August 31, 2003 August 31, 2002
------------------------- -------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class Y
Shares sold 8,692,881 $ 604,747,099 2,739,467 $ 226,588,674
Shares reacquired (621,570) (44,129,814) (2,090,647) (171,688,278)
- -------------------------------------------------------------------------------
Net Increase 8,071,311 $ 560,617,285 648,820 $ 54,900,396
- -------------------------------------------------------------------------------
Class Z*
Shares sold 673,406 $ 44,791,154 966,679 $ 83,507,558
Shares reacquired (5,757,800) (397,160,680) (1,415,294) (102,206,643)
- -------------------------------------------------------------------------------
Net Decrease (5,084,394) $(352,369,526) (448,615) $ (18,699,085)
- -------------------------------------------------------------------------------
*As of April 21, 2003, Class Z shares were fully redeemed.
7. Capital Loss Carryforward
At August 31, 2003, the Fund had, for Federal income tax purposes,
approximately $55,475,000 of unused capital loss carryforwards available to
offset future capital gains. To the extent that these carryforward losses are
used to offset capital gains, it is probable that the gains so offset will not
be distributed. The amount and year of expiration for each carryforward loss is
indicated below. Expiration occurs on August 31 of the year indicated:
2010 2011
--------------------------------------------
Carryforward Amounts $42,260,000 $13,215,000
--------------------------------------------
In addition, the Fund had $41,274,552 of capital losses realized after October
31, 2002, which were deferred for tax purposes to the first day of the
following fiscal year.
8. Income Tax Information and Distributions to Shareholders
At August 31, 2003, the tax basis components of distributable earnings were:
----------------------------------------
Accumulated capital losses $(55,474,539)
----------------------------------------
Unrealized appreciation 687,336,628
----------------------------------------
The difference between book basis and tax basis unrealized appreciation is
attributable primarily to wash sale loss deferrals.
15 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
FINANCIAL HIGHLIGHTS
For a share of each class of capital stock outstanding throughout each year
ended August 31, unless otherwise noted:
Class A Shares 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)/ 1999/(1)/
- ---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $62.24 $ 91.46 $110.53 $ 67.73 $33.78
- -----------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.58) (0.71) (0.79) (0.59) (0.48)
Net realized and unrealized gain (loss) 16.70 (28.51) (18.28) 44.11 35.31
- -----------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 16.12 (29.22) (19.07) 43.52 34.83
- -----------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains -- -- -- (0.72) (0.88)
- -----------------------------------------------------------------------------------------------------
Total Distributions -- -- -- (0.72) (0.88)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $78.36 $ 62.24 $ 91.46 $110.53 $67.73
- -----------------------------------------------------------------------------------------------------
Total Return 25.90% (31.95)% (17.25)% 64.91% 104.42%
- -----------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $2,332 $1,639 $1,952 $1,731 $690
- -----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.22% 1.21% 1.17% 1.14% 1.18%
Net investment loss (0.86) (0.88) (0.80) (0.66) (0.89)
- -----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 1% 0% 1% 8%
- -----------------------------------------------------------------------------------------------------
Class B Shares 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)/ 1999/(1)/
- ---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $57.19 $ 84.73 $103.24 $ 63.82 $32.12
- -----------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (1.03) (1.26) (1.48) (1.23) (0.87)
Net realized and unrealized gain (loss) 15.27 (26.28) (17.03) 41.37 33.45
- -----------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 14.24 (27.54) (18.51) 40.14 32.58
- -----------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains -- -- -- (0.72) (0.88)
- -----------------------------------------------------------------------------------------------------
Total Distributions -- -- -- (0.72) (0.88)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $71.43 $ 57.19 $ 84.73 $103.24 $63.82
- -----------------------------------------------------------------------------------------------------
Total Return 24.90% (32.50)% (17.93)% 63.58% 102.78%
- -----------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $1,984 $1,542 $1,893 $1,485 $470
- -----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 2.03% 2.03% 1.99% 1.94% 2.00%
Net investment loss (1.67) (1.70) (1.62) (1.47) (1.70)
- -----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 1% 0% 1% 8%
- -----------------------------------------------------------------------------------------------------
(1) Per share amounts have been calculated using the monthly average shares
method.
16 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of capital stock outstanding throughout each year
ended August 31, unless otherwise noted:
Class L Shares 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)/ 1999/(1)/
- -------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $57.44 $ 85.03 $103.54 $ 63.99 $32.19
- -------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.99) (1.20) (1.44) (1.24) (0.84)
Net realized and unrealized gain (loss) 15.34 (26.39) (17.07) 41.51 33.52
- -------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 14.35 (27.59) (18.51) 40.27 32.68
- -------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains -- -- -- (0.72) (0.88)
- -------------------------------------------------------------------------------------------------
Total Distributions -- -- -- (0.72) (0.88)
- -------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $71.79 $ 57.44 $ 85.03 $103.54 $63.99
- -------------------------------------------------------------------------------------------------
Total Return 24.98% (32.45)% (17.88)% 63.62% 102.87%
- -------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $1,415 $1,076 $1,286 $696 $162
- -------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.96% 1.95% 1.94% 1.94% 1.94%
Net investment loss (1.60) (1.62) (1.57) (1.46) (1.64)
- -------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 1% 0% 1% 8%
- -------------------------------------------------------------------------------------------------
Class Y Shares 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)/ 1999/(1)/
- -------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $63.81 $ 93.38 $112.46 $ 68.69 $34.13
- -------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.30) (0.41) (0.45) (0.30) (0.29)
Net realized and unrealized gain (loss) 17.16 (29.16) (18.63) 44.79 35.73
- -------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 16.86 (29.57) (19.08) 44.49 35.44
- -------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains -- -- -- (0.72) (0.88)
- -------------------------------------------------------------------------------------------------
Total Distributions -- -- -- (0.72) (0.88)
- -------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $80.67 $ 63.81 $ 93.38 $112.46 $68.69
- -------------------------------------------------------------------------------------------------
Total Return 26.42% (31.67)% (16.97)% 65.42% 105.15%
- -------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $876 $178 $200 $219 $172
- -------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.81% 0.82% 0.82% 0.82% 0.82%
Net investment loss (0.43) (0.49) (0.45) (0.34) (0.53)
- -------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 1% 0% 1% 8%
- -------------------------------------------------------------------------------------------------
(1) Per share amounts have been calculated using the monthly average shares
method.
17 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
Smith Barney Aggressive Growth Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Smith Barney Aggressive Growth Fund Inc.
("Fund") as of August 31, 2003, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for each of the
years in the five-year period 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 audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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. Our procedures
included confirmation of securities owned as of August 31, 2003, by
correspondence with the custodian. As to securities purchased or sold but not
yet received or delivered, we performed other appropriate auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of August 31, 2003, and the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
five-year period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ KPMG LLP
New York, New York
October 13, 2003
18 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED)
Information about Directors and Officers
The business and affairs of the Smith Barney Aggressive Growth Fund Inc.
("Fund") are managed under the direction of the Fund's Board of Directors.
Information pertaining to the Directors and Officers of the Fund is set forth
below. The Statement of Additional Information includes additional information
about the Fund's Directors and is available, without charge, upon request by
calling Citicorp Trust Bank, fsb. at 1-800-451-2010 or Primerica Shareholder
Services at 1-800-544-5445.
Number of
Term of Portfolios in Other
Office* and Fund Complex Directorships
Position(s) Held Length of Principal Occupation(s) Overseen by Held by
Name, Address and Age with Fund Time Served During Past Five Years Director Director
- ------------------------------------------------------------------------------------------------------------------------------
Non-Interested Directors:
Paul R. Ades Director Since Law Firm of Paul R. Ades, PLLC 15 None
Paul R. Ades, PLLC 1994 (April 2000-Present); Partner in
181 West Main Street, Suite C Law Firm of Murov & Ades, Esqs.
Babylon, NY 11702 until March 2000
Age 62
Herbert Barg Director Since Retired 42 None
1460 Drayton Lane 1994
Wynewood, PA 19096
Age 79
Dwight B. Crane Director Since Professor, Harvard Business School 49 None
Harvard Business School 1981
Soldiers Field
Morgan Hall #375
Boston, MA 02163
Age 65
Frank G. Hubbard Director Since President of Avatar International, 15 None
Avatar International, Inc. 1993 Inc. (Business Development) (Since
87 Whittredge Road 1998); Vice President of S&S
Summit, NJ 07901 Industries (Chemical Distribution)
Age 65 (1995-1998)
Jerome H. Miller Director Since Retired 15 None
c/o R. Jay Gerken 1998
Citigroup Asset Management ("CAM")
399 Park Avenue, 4th Floor
New York, NY 10022
Age 64
Ken Miller Director Since President of Young Stuff 15 None
Young Stuff Apparel, Group Inc. 1994 Apparel Group, Inc. (Since 1963)
209 West 38th Street
New York, NY 10018
Age 61
19 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Portfolios in Other
Office* and Fund Complex Directorships
Position(s) Held Length of Principal Occupation(s) Overseen by Held by
Name, Address and Age with Fund Time Served During Past Five Years Director Director
- --------------------------------------------------------------------------------------------------------------------------
Interested Director:
R. Jay Gerken, CFA** Chairman, Since Managing Director of Citigroup 218 None
CAM President and 2002 Global Markets Inc. ("CGM");
399 Park Avenue, 4th Floor Chief Executive Chairman, President, Chief
New York, NY 10022 Officer Executive Officer and Director of
Age 52 Smith Barney Fund Management
LLC ("SBFM"), Travelers
Investment Adviser, Inc. ("TIA")
and Citi Fund Management Inc.
("CFM")
Officers:
Lewis E. Daidone Senior Vice Since Managing Director of CGM; N/A N/A
CAM President and 1993 Director and Senior Vice President
125 Broad Street, 11th Floor Chief of SBFM and TIA; Director of CFM;
New York, NY 10004 Administrative Chief Financial Officer and
Age 46 Officer Treasurer of certain mutual funds
affiliated with Citigroup Inc.
("Citigroup") and formerly
Treasurer of the mutual funds
affiliated with Citigroup
Richard L. Peteka Chief Financial Since Director of CGM; Chief Financial N/A N/A
CAM Officer and 2002 Officer and Treasurer of certain
125 Broad Street, 11th Floor Treasurer funds affiliated with Citigroup;
New York, NY 10004 Formerly Director and Head of
Age 42 Internal Control for Citigroup Asset
Management U.S. Mutual Fund
Administration from 1999-2002;
Vice President, Head of Mutual
Fund Administration and Treasurer
at Oppenheimer Capital from
1996-1999
Richard A. Freeman Vice President Since Managing Director of CGM and N/A N/A
CAM and Investment 1983 Investment Officer of SBFM
399 Park Avenue, 4th Floor Officer
New York, NY 10022
Age 49
Kaprel Ozsolak Controller Since Vice President of CGM N/A N/A
CAM 2002
125 Broad Street, 11th Floor
New York, NY 10004
Age 38
Christina T. Sydor Secretary Since Managing Director of CGM; N/A N/A
CAM 1993 General Counsel and Secretary of
300 First Stamford Place SBFM and TIA
4th Floor
Stamford, CT 06902
Age 52
- --------
* Each Director and Officer serves until his or her successor has been duly
elected and qualified.
** Mr. Gerken is an "interested person" of the Fund as defined in the
Investment Company Act of 1940, as amended, because Mr. Gerken is an officer
of SBFM and certain of its affiliates.
20 Smith Barney Aggressive Growth Fund Inc. | 2003 Annual Report
SMITH BARNEY
AGGRESSIVE GROWTH FUND INC.
DIRECTORS INVESTMENT ADVISER
Paul R. Ades AND ADMINISTRATOR
Herbert Barg Smith Barney Fund
Dwight B. Crane Management LLC
R. Jay Gerken, CFA
Chairman
Frank G. Hubbard DISTRIBUTORS
Jerome H. Miller Citigroup Global Markets Inc.
Ken Miller PFS Distributors, Inc.
CUSTODIAN
OFFICERS State Street Bank and
R. Jay Gerken, CFA Trust Company
President and
Chief Executive Officer
TRANSFER AGENT
Lewis E. Daidone Citicorp Trust Bank, fsb.
Senior Vice President and 125 Broad Street, 11th Floor
Chief Administrative Officer New York, New York 10004
Richard L. Peteka SUB-TRANSFER AGENTS
Chief Financial Officer PFPC Global Fund Services
and Treasurer P.O. Box 9699
Providence, Rhode Island
Richard A. Freeman 02940-9699
Vice President and
Investment Officer Primerica Shareholder Services
P.O. Box 9662
Kaprel Ozsolak Providence, Rhode Island
Controller 02940-9662
Christina T. Sydor
Secretary
Smith Barney Aggressive Growth Fund Inc.
This report is submitted for the general information of shareholders of the
Smith Barney Aggressive Growth Fund Inc., but it may also be used as sales
literature when preceded or accompanied by a current Prospectus, which gives
details about charges, expenses, investment objectives and operating policies
of the Fund. If used as sales material after November 30, 2003, this report
must be accompanied by performance information for the most recently
completed calendar quarter.
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
Smith Barney Mutual Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004
For complete information on any Smith Barney Mutual Funds, including
management fees and expenses, call or write your financial professional for a
free prospectus. Read it carefully before you invest or send money.
www.smithbarneymutualfunds.com
(C)2003 Citigroup Global Markets Inc.
Member NASD, SIPC
FD0433 10/03 03-5499
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that Dwight
Crane, a member of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to
qualify as an "audit committee financial expert," and has designated
Mr. Crane as the Audit Committee's financial expert. Mr. Crane is an
"independent" Director pursuant to paragraph (a)(2) of Item 3 to Form
N-CSR.
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 officer and principal
financial officer have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-
3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act")) are effective as of a date within 90 days of the
filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the
disclosure controls and procedures required by Rule 30a-3(b)
under the 1940 Act and 15d-15(b) under the Securities Exchange
Act of 1934
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940
Act) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case
of an annual report) that have materially affected, or are
likely to materially affect the registrant's internal control
over financial reporting.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
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, there unto duly authorized.
Smith Barney Aggressive Growth Fund Inc.
By: /s/ R. Jay Gerken
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R. Jay Gerken
Chief Executive Officer of
Smith Barney Aggressive Growth Fund Inc.
Date: October 31, 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: /s/ R. Jay Gerken
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R. Jay Gerken
Chief Executive Officer of
Smith Barney Aggressive Growth Fund Inc.
Date: October 31, 2003
By: /s/ Richard L. Peteka
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Richard L. Peteka
Chief Financial Officer of
Smith Barney Aggressive Growth Fund Inc.
Date: October 31, 2003