<PAGE>
Annual Report
- ---------------------------
Premier Growth
Fund, Inc.
- ---------------------------
October 31, 1995
<PAGE>
Premier Growth Fund, Inc.
- ----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this annual report on the activity of
the Premier Growth Fund, Inc. for the 12-month period from November 1, 1994
through October 31, 1995. During that period, the Fund's Class A shares
provided a total return of 18.77%, and the Class B shares provided a total
return of 17.88%.* The Fund's Class C shares commenced operations on June 21,
1995. Since inception through October 31, 1995 the Fund's Class C shares
provided total return of 4.71%.During the 12-month period ended October 31,
1995, the Standard & Poor's 500 Composite Stock Price Index provided a return
of 26.41%** and the Morgan Stanley Capital International EAFE Index provided
a total return of (0.37)%.**
Portfolio Composition
At the close of the period, the Fund had 5.2% of its net assets in
short-term Treasuries and the balance in equities. In the equity portion of
the Fund, industry concentrations were in consumer nondurables and health
care. As market conditions permit, we will continue to reduce the position
in Treasuries and commit these assets to what we consider to be high quality
equities.
Economic Outlook
In our view, a successful transition has been accomplished between the
below-par economic expansion of the first two quarters of 1995, and what we
expect will be an extended cycle of moderate growth, with minimal pricing
pressures over the upcoming quarters. We expect annual Gross Domestic
Product growth to fall in an average range between 2.5% and 3.0%, or somewhat
below the historical post-war norm. We consider the threat of a recession
developing in the near future unlikely, because we believe inflation will
remain contained at or below 3.0%, with interest rates on the 30-year bond
declining below 6.0% early in 1996. We remain hopeful that a meaningful
deficit reduction package can be passed in 1995. Positive sentiment and
momentum appear to be in place to enact significant long-term change in
fiscal spending patterns, which may weaken growth somewhat more than our
projections over the shorter term, but which have enormously constructive
implications for the U.S. economy from a lengthened perspective.
Investment Strategy
The Fund's investment strategy has and will continue to emphasize
industry sectors and those large capitalization, globally positioned
companies, that we believe will have highly visible earnings growth over our
investment time horizon of three to five years, and beyond.
Currently, we believe, the aggregate GDP of developing economies is
poised to surpass that of the major industrialized economies for the first
time. Therefore, the Fund's investment strategy is tailored to what we
believe are and will continue to be the multinational industry leaders in
sectors which we believe will suffer least from maturing markets among the
industrialized economies, and are positioned to maintain strong earnings
growth from expanding international sales. Many of the Fund's holdings,
particularly in consumer nondurables and health care, are perceived as
defensive issues and thus have received improving investor sentiment, as
indications of moderating economic growth are becoming more pervasive. With
a multiyear investment horizon, however, we attempt to identify those
industry sectors and particular issues which we believe will outperform over
a full market cycle and beyond,
<PAGE>
directed by a top-down macroeconomic outlook well into the next decade.
We believe that market leadership should continue to come from industry
consolidation, share repurchases, strong balance sheets, managerial strength,
brand recognition and proprietary technologies.
Investment Highlights
The investment climate began an improving trend in the early weeks of the
reporting period, with a peak in long-term interest rates in November, 1994,
followed by rallies in fixed income and equity markets in 1995. Although
equity prices have appreciated considerably, uncertainty about the strength
of the U.S. economy caused volatility in equity markets. For example, there
were sharp corrections in response to earnings disappointments.
The Fund's focus on what we believe are high quality global industry
leaders in consumer nondurables had the most positive impact on its
performance during the 12-month reporting period, led by shares of Philip
Morris, Coca-Cola, PepsiCo, Procter & Gamble and Gillette. The holdings in
health care, financial services and technology also strengthened the Fund's
performance, led by shares of Merck & Co., Citicorp and General Electric.
With our positive long-term outlook on equity markets, the Fund's cash
position was gradually reduced during the reporting period, from 15.4% to
5.2%, with the purchase of a wide variety of what we perceive to be quality
holdings. The purchases added to many of the Fund's holdings and established
new positions with shares of Abbott Laboratories, Air Liquide, General Motors
Class E, Intel, McDonald's, Norsk Hydro and Philips Electronics.
We appreciate your investment in Premier Growth Fund, Inc. and we will
continue to seek rewarding returns on your behalf.
Sincerely,
Fayez Sarofim
Portfolio manager
November 15, 1995
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B shares.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of stock market performance. The Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index is a widely accepted
unmanaged index of foreign stock market performance.
<PAGE>
Premier Growth Fund, Inc. October 31, 1995
- ------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PREMIER GROWTH FUND, INC. CLASS A SHARES AND CLASS B SHARES AND
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
<TABLE>
<CAPTION>
Premier Premier Standard & Poor's
Growth Fund Growth Fund Composite Stock
(Class A Shares) (Class B Shares) Price Index *
---------------- ---------------- -----------------
<S> <C> <C> <C>
7/15/93 9549 10,000 10,000
10/31/93 10,092 10,536 10,470
10/31/94 10,718 11,112 10,873
10/31/95 12,730 12,799 13,745
<FN>
*Source: Lipper Analytical Services, Inc.
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
- -------------------------------------------------------------------------------------------------------------------------------
Class A Shares Class B Shares
- --------------------------------------------------------------- -----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 10/31/95 Sales Charge Sales Charge (4.5%) Period Ended 10/31/95 Redemption Redemption*
- --------------------- ---------------- ------------------ ---------------------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
1 Year 18.77% 13.44% 1 Year 17.88% 13.88%
From Inception (7/15/93) 13.32 11.07 From Inception (7/15/93) 12.45 11.33
</TABLE>
<TABLE>
<CAPTION>
Actual Aggregate Total Returns
- ----------------------------------------------------------------------------
Class C Shares
- ----------------------------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 10/31/95 Redemption Redemption **
- ----------------------- ------------- ---------------------
<S> <C> <C>
From Inception (6/21/95) 4.71% 3.71%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A
shares and Class B shares of Premier Growth Fund, Inc. on 7/15/93 (Inception
Date) to a $10,000 investment made in the Standard & Poor's 500 Composite
Stock Price Index on that date. For comparative purposes, the value of the
Index on 6/30/93 is used as the beginning value on 7/15/93. All dividends
and capital gain distributions are reinvested. Performance for Class C shares
will vary from the performance of both Class A shares and Class B shares
shown above due to differences in charges and expenses.
The Fund's performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and the maximum contingent deferred
sales charge on Class B shares and all other applicable fees and expenses.
The Standard & Poor's 500 Composite Stock Price Index is a widely accepted,
unmanaged index of overall stock market performance, which does not take into
account charges, fees and other expenses. Further information relating to
Fund performance, including expense reimbursements, if applicable, is
contained in the Condensed Financial Information section of the Prospectus
and elsewhere in this report.
*Maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<PAGE>
Premier Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
Common Stocks--93.6% Shares Value
- ---------------------------------------------------------------------------------- --------- -------------
<S> <C> <C> <C>
Aerospace & Electronics--9.5% Emerson Electric .......................... 7,000 $ 498,750
General Electric .......................... 25,000 1,581,250
Intel ..................................... 12,000 838,500
Motorola .................................. 10,000 656,250
Philips Electronics NV A.D.R .............. 25,000 965,625
Texas Instruments ......................... 5,000 341,250
-------------
4,881,625
-------------
Auto Related--1.4% Ford Motor ................................ 25,000 718,750
-------------
Banking--7.5% Citicorp .................................. 25,000 1,621,875
Deutsche Bank A.D.R. ...................... 16,000 724,000
HSBC Holdings A.D.R. ...................... 5,500 805,750
Union Bank of Switzerland ................. 3,010 689,212
-------------
3,840,837
-------------
Capital Goods--1.0% AlliedSignal .............................. 12,000 510,000
-------------
Chemicals--6.0% Air Liquide A.D.R. ........................ 30,000 1,005,000
Dow Chemical .............................. 11,500 789,188
duPont (E.I.) de Nemours .................. 12,500 779,688
Norsk Hydro A.D.R. ........................ 12,500 500,000
-------------
3,073,876
-------------
Energy--8.2% Chevron ................................... 8,000 374,000
Elf Aquitaine A.D.S. ...................... 15,000 506,250
Exxon ..................................... 12,500 954,688
Mobil ..................................... 3,500 352,625
Royal Dutch Petroleum ..................... 10,000 1,228,750
Total, Cl. B, A.D.S. ...................... 25,000 771,875
-------------
4,188,188
-------------
Financial--2.0% Eurafrance ................................ 3,060 1,024,700
-------------
Food, Beverage & Tobacco--19.0% Coca-Cola ................................. 28,000 2,012,500
Guinness PLC, A.D.R. ...................... 25,000 1,000,000
Kellogg ................................... 14,000 1,011,500
LVMH Moet Hennessy Louis Vuitton A.D.S..... 26,050 1,038,744
Nestle A.D.R. ............................. 18,000 940,500
PepsiCo ................................... 22,000 1,160,500
Philip Morris Cos.......................... 20,000 1,690,000
Sara Lee .................................. 5,000 146,875
Seagram ................................... 22,000 792,000
-------------
9,792,619
-------------
Health Care--13.5% Abbott Laboratories........................ 25,000 993,750
Johnson & Johnson ......................... 19,000 1,548,500
Merck ..................................... 30,000 1,725,000
Pfizer .................................... 25,000 1,434,375
Roche Holdings A.D.S ...................... 17,000 1,234,625
-------------
6,936,250
-------------
</TABLE>
<PAGE>
Premier Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ---------------------------------------------------------------------------------- --------- -------------
<S> <C> <C> <C>
Insurance--2.4% AXA........................................ 12,000 $ 667,527
Zurich Versicherung ....................... 2,000 572,435
-------------
1,239,962
-------------
Leisure Time--4.0% Disney (Walt) ............................. 12,000 691,500
Eastman Kodak ............................. 12,000 751,500
McDonalds ................................. 15,000 615,000
-------------
2,058,000
-------------
Media/Entertainment--2.5% News A.D.S. ............................... 12,000 238,500
Pearson PLC ............................... 75,288 748,579
Reader's Digest Association, Cl. A......... 6,000 301,500
-------------
1,288,579
-------------
Metals--.5% Debeers Consolidated Mining A.D.R. ........ 10,000 275,000
-------------
Multi Industry--2.4% Eaux (Generale Des)........................ 6,000 558,525
Minnesota Mining & Manufacturing .......... 12,000 682,500
-------------
1,241,025
-------------
Office & Business Equipment--2.3% AT&T ...................................... 8,000 512,000
Ericsson (LM) Telephone, Cl. B, A.D.R...... 10,000 213,594
General Motors, CL. E ..................... 10,000 471,250
-------------
1,196,844
-------------
Paper & Forest Products--1.0% International Paper........................ 13,500 499,500
-------------
Personal Care--8.1% Gillette .................................. 22,000 1,064,250
International Flavor & Fragrances.......... 15,000 723,750
L'Oreal A.D.R.............................. 20,000 980,000
Procter & Gamble .......................... 15,000 1,215,000
Unilever N.V. A.D.R. ...................... 1,500 196,500
-------------
4,179,500
-------------
Retail--.9% Wal-Mart Stores............................ 20,000 432,500
-------------
Utilities--1.4% Veba ...................................... 18,000 738,793
-------------
TOTAL COMMON STOCKS
(cost $41,720,676)....................... $48,116,548
-------------
-------------
Preferred Stock--.7%
- ----------------------------------------------------------------------------------
Media/Entertainment News A.D.S., Cum $.4428
(cost $369,053).......................... 20,000 $ 365,000
-------------
-------------
</TABLE>
<PAGE>
Premier Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1995
<TABLE>
<CAPTION>
Principal
Corporate Bond--.0% Amount Value
- ---------------------------------------------------------------------------------- --------- -------------
<S> <C> <C> <C>
Zurich International, 2%, 3/1/2001
(cost $3,384) ........................... $ 5,000 $ 4,348
-------------
-------------
Short-Term Investments--5.2%
- ----------------------------------------------------------------------------------
U.S. Treasury Bills: 6.15%, 11/16/1995 ......................... 64,000 $ 63,862
5.72%, 11/24/1995 ......................... 27,000 26,912
5.35%, 12/7/1995 .......................... 622,000 618,840
6.52%, 12/14/1995 ......................... 1,417,000 1,408,172
5.42%, 12/21/1995 ......................... 224,000 222,387
5.34%, 12/28/1995 ......................... 340,000 337,195
-------------
TOTAL SHORT-TERM INVESTMENTS
(cost $2,677,257) ....................... $ 2,677,368
-------------
-------------
TOTAL INVESTMENTS (cost $44,770,370) ............................................. 99.5% $51,163,264
------- -------------
------- -------------
CASH AND RECEIVABLES (NET) ....................................................... .5% $ 261,688
------- -------------
------- -------------
NET ASSETS........................................................................ 100.0% $51,424,952
------- -------------
------- -------------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $44,770,370)--see statement..................................... $51,163,264
Receivable for subscriptions to Common Stock............................ 493,069
Dividends and interest receivable....................................... 75,873
Prepaid expenses........................................................ 44,863
-----------
51,777,069
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 32,626
Due to Distributor...................................................... 30,046
Due to Custodian........................................................ 162,980
Payable for Common Stock redeemed....................................... 68,165
Accrued expenses and other liabilities.................................. 58,300 352,117
--------- -----------
NET ASSETS.................................................................. $51,424,952
-----------
-----------
REPRESENTED BY:
Paid-in capital......................................................... $44,825,781
Accumulated undistributed investment income--net........................ 270,337
Accumulated net realized (loss) on investments and foreign currency
transactions.......................................................... (64,954)
Accumulated net unrealized appreciation on investments and foreign
currency transactions................................................. 6,393,788
-----------
NET ASSETS at value......................................................... $51,424,952
-----------
-----------
Shares of Common Stock outstanding:
Class A Shares
(100 million shares of $.001 par value authorized)................... 1,147,183
-----------
-----------
Class B Shares
(100 million shares of $.001 par value authorized).................. 2,007,089
-----------
-----------
Class C Shares
(100 million shares of $.001 par value authorized).................. 2,940
-----------
-----------
NET ASSET VALUE per share:
Class A Shares
($18,822,141 / 1,147,183 shares).................................... $16.41
-------
-------
Class B Shares
($32,555,139 / 2,007,089 shares).................................... $16.22
-------
-------
Class C Shares
($47,672 / 2,940 shares)............................................ $16.22
-------
-------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Growth Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Operations year ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Cash dividends (net of $34,858 foreign taxes withheld at source)...... $ 662,384
Interest.............................................................. 239,070
----------
Total Income...................................................... $ 901,454
Expenses:
Investment advisory fee--Note 2(a)..................................... 240,420
Distribution fees--Note 2(b)........................................... 146,458
Shareholder servicing costs--Note 2(c)................................. 136,125
Registration fees...................................................... 51,755
Auditing fees.......................................................... 28,910
Legal fees............................................................. 23,650
Directors' fees and expenses--Note 2(d)................................ 17,750
Prospectus and shareholders' reports................................... 14,946
Custodian fees......................................................... 10,324
Miscellaneous.......................................................... 16,608
-----------
686,946
Less--reducton in advisory fee due to undertakings--Note 2(a)........... 148,716
-----------
Total Expenses.................................................... 538,230
-----------
INVESTMENT INCOME--NET............................................. 363,224
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments and foreign currency
transactions--Note 3................................................... $ (64,990)
Net unrealized appreciation on investments and foreign currency transactions 5,456,383
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 5,391,393
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $5,754,617
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Growth Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------
1994 1995
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 140,756 $ 363,224
Net realized gain (loss) on investments.............................. 36 (64,990)
Net unrealized appreciation on investments for the year.............. 713,079 5,456,383
----------- -----------
Net Increase In Net Assets Resulting From Operations............... 853,871 5,754,617
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares..................................................... -- (126,276)
Class B shares..................................................... -- (107,367)
Class C shares..................................................... -- --
----------- -----------
Total Dividends.................................................. -- (233,643)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares..................................................... 6,206,463 10,672,133
Class B shares..................................................... 9,723,924 23,316,171
Class C shares..................................................... -- 47,427
Dividends reinvested:
Class A shares..................................................... -- 118,079
Class B shares..................................................... -- 92,549
Class C shares..................................................... -- --
Cost of shares redeemed:
Class A shares..................................................... (1,868,176) (2,206,613)
Class B shares..................................................... (1,865,001) (5,078,376)
Class C shares..................................................... -- --
----------- -----------
Increase In Net Assets From Capital Stock Transactions........... 12,197,210 26,961,370
----------- -----------
Total Increase In Net Assets................................... 13,051,081 32,482,344
NET ASSETS:
Beginning of year.................................................... 5,891,527 18,942,608
----------- -----------
End of year (including undistributed investment income--net:
$140,756 in 1994 and $270,337 in 1995)............................. $18,942,608 $51,424,952
----------- -----------
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Shares
------------------------------------------------------------------------------
Class A Class B Class C
------------------------- --------------------------- ----------
Year Ended
Year Ended October 31, Year Ended October 31, October 31,
-------------------------- ---------------------------
1994 1995 1994 1995 1995*
--------- --------- ---------- --------- -----
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold................ 463,318 709,874 729,175 1,554,836 2,940
Shares issued for dividends
reinvested............... -- 8,918 -- 7,027 --
Shares redeemed............ (140,311) (147,256) (140,585) (337,253) --
--------- --------- ----------- --------- -----
Net Increase In Shares
Outstanding............ 323,007 571,536 588,590 1,224,610 2,940
--------- --------- ----------- --------- -----
--------- --------- ----------- --------- -----
<FN>
- --------------------
* From June 21, 1995 (commencement of initial offering) to October 31, 1995.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
---------------------------------- -------------------------------- --------------
Year Ended
Year Ended October 31, Year Ended October 31, October 31,
---------------------------------- --------------------------------
PER SHARE DATA: 1993(1) 1994 1995 1993(1) 1994 1995 1995(2)
<S> <C> <C> <C> <C> <C> <C> <C>
------ ------ ------ ------ ------ ------ ------
Net asset value, beginning
of year...................... $12.50 $13.21 $14.03 $12.50 $13.17 $13.89 $15.56
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income (loss)--net.. (.01) .16 .20 (.03) .09 .12 (.01)
Net realized and unrealized
gain on investments.......... .72 .66 2.39 .70 .63 2.34 .67
------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations............... .71 .82 2.59 .67 .72 2.46 .66
------ ------ ------ ------ ------ ------ ------
Distributions;
Dividends from investment
income--net.................. -- -- (.21) -- -- (.13) --
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year... $13.21 $14.03 $16.41 $13.17 $13.89 $16.22 $16.22
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN (3)........ 5.68%(4) 6.21% 18.77% 5.36%(4) 5.47% 17.88% 4.71%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................... .77%(4) 1.33% 1.22% 1.14%(4) 2.07% 1.98% 1.56%(4)
Ratio of net investment income
(loss) to average net assets (.12%)(4) 1.49% 1.59% (.53%)(4) .71% .84% (.63%)(4)
Decrease reflected in above
expense ratios due to
undertakings by the Manager. .88%(4) .75% .53% 1.01%(4) .75% .46% .73%(4)
Portfolio Turnover Rate....... -- .71% 1.16% -- .71% 1.16% 1.16%
Net Assets, end of year
(000's Omitted)............. $3,338 $8,075 $18,822 $2,554 $10,867 $32,555 $48
<FN>
- ---------------
(1) From July 15, 1993 (commencement of operations) to October 31, 1993.
(2) From June 21, 1995 (commencement of initial offering) to October 31, 1995.
(3) Exclusive of sales load.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's investment adviser. Fayez
Sarofim & Co. ("Sarofim") serves as the Fund's sub-investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc. Dreyfus is a
direct subsidiary of Mellon Bank, N.A.
The Fund offers Class A, Class B and Class C shares. Class A shares are
subject to a sales charge imposed at the time of purchase, Class B shares are
subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within six years of purchase and Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Other
differences between the three Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an
exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities,
resulting from changes in exchange rates. Such gains and losses are included
with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
requirements of the Internal Revenue Code. To the extent that net
realized capital gain can be offset by capital loss carryovers, it is the
policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $67,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to October 31, 1995. If not
applied, the carryover expires in fiscal 2003.
NOTE 2--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate of .75 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Investment Advisory Agreement further provides that if in any full fiscal
year the aggregate expenses of the Fund, exclusive of interest, taxes,
brokerage and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct from the fee to
be paid to Dreyfus, or Dreyfus will bear, such excess expense to the extent
required by state law. The most stringent state expense limitation
applicable to the Fund presently requires reimbursement of expenses in any
full fiscal year that such expenses (excluding 12b-1 Distribution Plan fees
and certain expenses as described above) exceed 21/2% of the first $30
million, 2% of the next $70 million and 11/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with California
"blue sky" regulations.
However, Dreyfus had undertaken from November 1, 1994 through June 30,
1995, to reduce the management fee paid by the Fund, to the extent that the
Fund's aggregate expenses (exclusive of certain expenses as described above)
exceeded specified annual percentages of the Fund's average daily net assets.
The Manager has currently undertaken from July 1, 1995 through October 31,
1996 to reduce the management fees paid by, or reimburse such excess expenses
of the Fund, to the extent that the Fund's aggregate annual expenses
(excluding 12b-1 Distribution Plan fees and certain expenses as described
above) exceed an annual rate of 1.25 of 1% of the average daily value of the
Fund's net assets. The reduction in investment advisory fee, pursuant to the
undertakings, amounted to $148,716 for the year ended October 31, 1995.
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and
Sarofim, Dreyfus has agreed to pay Sarofim a monthly sub-advisory fee,
computed at the following annual rates:
Annual Fee as a Percentage of
Total Net Assets Average Daily Net Assets
---------------- -----------------------------
0 to $25 million......................... .11 of 1%
$25 up to $75 million.................... .18 of 1%
$75 up to $200 million................... .22 of 1%
$200 up to $300 million.................. .26 of 1%
In excess of $300 million................ .275 of 1%
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
retained $446 during the year ended October 31, 1995 from commissions earned
on sales of the Fund's shares.
(b) Under a Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund pays the Distributor for distributing the Fund's
Class B and Class C shares at an annual rate of .75 of 1% of the value of the
average daily net assets of Class B and Class C shares. During the year
ended October 31, 1995, $146,453 was charged to the Fund for the Class B
shares and $5 was charged to the Fund for the Class C shares.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the year ended October 31, 1995,
$31,321, $48,817 and $2 were charged to Class A, B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(d) Each director who is not an "affiliated person," as defined in the
Act receives from the Fund an annual fee of $1,500 and an attendance fee of
$250 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the year ended October 31, 1995,
amounted to $27,415,226 and $324,553, respectively.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $6,392,894, consisting of $6,941,354 gross unrealized
appreciation and $548,460 gross unrealized depreciation, excluding foreign
currency transactions.
At October 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Premier Growth Fund, Inc.
- -----------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Premier Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Premier Growth Fund, Inc., including the statement of investments, as of
October 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1995 by correspondence with the custodian.
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 Premier Growth Fund, Inc. at October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
December 1, 1995
<PAGE>
Premier Growth
Fund, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Fayez Sarofim & Co.
Two Houston Center,
Suite 2907
Houston, TX 77010
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 070AR9510
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PREMIER GROWTH FUND, INC. CLASS A SHARES AND CLASS B
SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK
PRICE INDEX
EXHIBIT A:
_____________________________________________________
| | PREMIER | PREMIER | |
| |GROWTH FUND| GROWTH FUND|STANDARD & POOR'S |
| PERIOD | (CLASS A | (CLASS B |500 COMPOSITE |
| | SHARES) | SHARES) |STOCK PRICE INDEX* |
|---------|-----------|------------|------------------ |
| 7/15/93 | 9,549 | 10,000 | 10,000 |
|10/31/93 | 10,092 | 10,536 | 10,470 |
|10/31/94 | 10,718 | 11,112 | 10,873 |
|10/31/95 | 12,730 | 12,799 | 13,745 |
|----------------------------------|------------------ |
*Source: Lipper Analytical Services, Inc.
