<PAGE>
- --------------------------------------------------------------------------------
W.P. STEWART & CO. GROWTH FUND, INC.
- --------------------------------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 1999
<PAGE>
- --------------------------------------------------------------------------------
W. P. STEWART & CO. GROWTH FUND, INC.
ANNUAL REPORT AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTS
Review of the Year
During the past year, the Fund's net asset value increased from $213.59 on
December 31, 1998, to $218.96 on December 31, 1999 after giving effect to a
distribution of $13.00 per share. This represents a total investment return of
+8.76%.
The strong gain of the S&P index in the US (+21%), was driven primarily by
technology shares, which now represent 30% of the index. If you exclude
technology share performance from the S&P, the index appreciated by just +2%
last year. Further, 1999 was characterized by rising interest rates, as the pace
of economic growth in the US continued to surprise the world. Growth stock
price-earnings ratios decline during periods of rising interest rates, and this
was an added downward pressure on the performance of our portfolio's quality
growth shares.
On average, the businesses in the Growth Fund increased their profits by more
than 16% during the year. However, at year-end, this portfolio of excellent
growth companies was selling at a multiple of only 29 times estimated 2000
earnings, quite attractively priced, and below the multiple of the S&P. We
believe that these portfolio earnings will double over the next five years, and
that therefore the prices of these shares should double as well.
Long-term View
The investment scene in 1999 was characterized by intense interest in technology
and Internet shares, as investors largely ignored the large risks inherent in
many of these companies. US economic growth was strong, while growth in Europe
and in emerging markets was much less exciting than some had hoped. Inflation
remained largely under control. The outlook for 2000 is that there may be
several more interest rate increases in the US, as an overheated economy, a
record low unemployment rate, and fears of inflation continue to be serious
concerns. However, with our diligent central bank, and increasing productivity
improvements, we expect the orderly slowing of the US economy and control of
inflation to be accomplished by these increases. This however, will probably
take another six to nine months to accomplish. Rates will then stabilize and,
probably decrease, and we expect corporate profits to continue to be
respectable, although at a somewhat slower pace of about 10%. This will of
course provide for a much more favorable environment for your shares.
Interest in technology will continue, but likely tempered by ever growing
awareness of the volatility and high multiple risk in these issues. As investors
move toward risk avoidance, our style will again become more in favor. Large
capitalization stocks, with excellent long term fundamentals, mid-teens earnings
growth, attractively priced, should do well.
We look forward to reporting to you again in July.
New York, N.Y.
February 4, 2000
MARILYN G. BRESLOW
PRESIDENT
W.P. Stewart & Co., Inc.
Investment Manager
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
COMPARISON OF A HYPOTHETICAL $50,000 INVESTMENT
W.P. STEWART & CO. GROWTH FUND VS. S&P 500*
[GRAPH]
[Client to provide plot points]
* For the period from February 28, 1994, (commencement of investment operations)
through December 31, 1999
<TABLE>
<CAPTION>
Total Investment Return*
February 28, 1994 - December 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
W.P. Stewart & Co. Growth Fund, Before Payment of Redemption Fee 204.84%
W.P. Stewart & Co. Growth Fund, After Payment of Redemption Fee 203.31%
S&P 500 253.45%
</TABLE>
* Total investment return is calculated assuming reinvestment of all
dividends and distributions at net asset value during the period. A
redemption fee equal to 0.5% of the gross redemption proceeds will be
charged by the Fund. S&P 500 return assumes no transaction costs.
1
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME OF ISSUER MARKET
AND TITLE OF ISSUE SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--97.1%
BANKS--4.9%
Northern Trust Corporation.................. 69,524 $ 3,684,772
------------
DATA PROCESSING SERVICES--10.9%
Automatic Data Processing, Inc.............. 152,928 8,238,996
------------
DRUGS & HEALTH CARE--19.5%
Johnson & Johnson........................... 34,020 3,168,113
Lilly (Eli) & Company....................... 46,032 3,061,128
Merck & Company, Inc........................ 27,774 1,862,594
Pfizer, Inc................................. 88,624 2,874,741
Stryker Corporation......................... 53,500 3,724,937
------------
14,691,513
------------
DRUG STORES--8.9%
CVS Corporation............................. 89,969 3,593,137
Walgreen Company............................ 105,000 3,071,250
------------
6,664,387
------------
ELECTRICAL EQUIPMENT--6.7%
General Electric Company.................... 32,744 5,067,134
------------
ELECTRONICS--5.2%
Intel Corporation........................... 47,498 3,909,679
------------
FINANCE & BANKING--5.0%
State Street Corporation.................... 51,793 3,784,126
------------
HOUSEHOLD PRODUCTS--4.5%
Gillette Company............................ 60,088 2,474,875
Procter & Gamble Company.................... 8,173 895,454
------------
3,370,329
------------
RESTAURANTS--4.5%
McDonald's Corporation...................... 83,046 3,347,792
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME OF ISSUER MARKET
AND TITLE OF ISSUE SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
RETAIL--23.1%
Autozone, Inc. (a).......................... 123,824 $ 4,001,063
Dollar General Corporation.................. 259,313 5,899,370
Gap, Inc.................................... 81,000 3,726,000
Home Depot, Inc............................. 55,500 3,805,219
------------
17,431,652
------------
SOFTWARE--3.9%
Microsoft Corporation (a)................... 25,058 2,925,522
------------
TOTAL COMMON STOCKS--(Cost $55,287,170) ......... 73,115,902
------------
TOTAL INVESTMENTS--(Cost $55,287,170)--97.1% 73,115,902
OTHER ASSETS LESS LIABILITIES-- 2.9% 2,195,325
------------
NET ASSETS--100.0% $ 75,311,227
============
</TABLE>
(a) No dividends paid on security.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at market value (Identified cost $ 55,287,170) .... $ 73,115,902
Cash ......................................................................... 1,865,947
Receivable for securities sold ............................................... 484,468
Receivable for Fund shares sold .............................................. 40,000
Dividends receivable ......................................................... 60,276
Prepaid Insurance ............................................................ 44,405
------------
Total Assets ............................................................ 75,610,998
------------
LIABILITIES:
Advisory fee payable ......................................................... 267,126
Other accrued expenses ....................................................... 32,645
------------
Total Liabilities ....................................................... 299,771
------------
NET ASSETS ................................................................... $ 75,311,227
============
NET ASSETS CONSIST OF:
Capital stock ($0.001 par value; 100,000,000 shares
Authorized, 343,956 shares issued and outstanding) ...................... $ 344
Capital paid in excess of par ................................................ 56,713,159
Accumulated realized gain on investments - net ............................... 768,992
Unrealized appreciation on investments - net ................................. 17,828,732
------------
NET ASSETS ................................................................... $ 75,311,227
============
Net asset value per share .................................................... $ 218.96
============
Redemption price per share ................................................... $ 217.87
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $1,496) ......................... $ 437,330
Interest ..................................................................... 75,552
------------
Total investment income ................................................. 512,882
------------
EXPENSES:
Investment advisory fees ..................................................... 956,167
Administrative fees .......................................................... 70,002
Custodian fees ............................................................... 50,397
Transfer agent fees .......................................................... 42,674
Registration fees ............................................................ 23,992
Directors fees ............................................................... 19,844
Miscellaneous fees ........................................................... 48,609
------------
Total expenses .......................................................... 1,211,685
------------
Net investment loss .......................................................... (698,803)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.............................................. 4,910,178
Net change in unrealized appreciation on investments.......................... 1,270,838
------------
Net gain on investments....................................................... 6,181,016
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 5,482,213
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss ............................ $ (698,803) $ (524,172)
Net realized gain on investments ............... 4,910,178 2,427,262
Net change in unrealized appreciation
on investments ............................... 1,270,838 10,121,250
-------------- --------------
Net increase in net assets
from operations ......................... 5,482,213 12,024,340
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments ............... (4,226,490) (2,348,801)
-------------- --------------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold ...................... 24,823,008 7,663,593
Shares issued to shareholders
in reinvestment of distributions .......... 4,139,027 2,268,863
Cost of redemptions ............................ (5,556,260) (5,159,672)
-------------- --------------
Net increase in net assets from Fund
share transactions ...................... 23,405,775 4,772,784
-------------- --------------
Net increase in net assets ..................... 24,661,498 14,448,323
============== ==============
NET ASSETS:
Beginning of year .............................. 50,649,729 36,201,406
-------------- --------------
End of year .................................... $ 75,311,227 $ 50,649,729
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR YEAR YEAR
ENDED ENDED ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
INCOME FROM INVESTMENT OPERATIONS:
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ........... $ 213.59 $ 168.71 $ 152.65
-------------- -------------- --------------
Net investment loss ........................ (2.03) (2.21) (1.87)
Net realized and unrealized gain on
investments ............................ 20.40 57.80 38.53
-------------- -------------- --------------
Net increase from investment operations ........ 18.37 55.59 36.66
Distributions to shareholders from net
realized gains on investments .............. (13.00) (10.71) (20.60)
-------------- -------------- --------------
Net asset value, end of period ................. $ 218.96 $ 213.59 $ 168.71
============== ============== ==============
TOTAL INVESTMENT RETURN (a) .................... 8.76% 33.30% 24.69%
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets ........ 1.90% 1.94% 2.13%
Ratio of fees and expenses waived and
reimbursed by the Adviser and
Administrator to average net assets ........ -- -- 0.02%
Ratio of net investment loss to
average net assets ......................... (1.10)% (1.26)% (1.35)%
Portfolio turnover ............................. 32% 34% 79%
Net assets, end of period (in thousands) ....... $ 75,311 $ 50,650 $ 36,201
</TABLE>
- --------------------------------------------------------------------------------
(a) Total investment return is calculated assuming a purchase of common stock
at net asset value at the beginning of the period, a sale at net asset
value at the end of the period, reinvestment of all dividends and
distributions at net asset value during the period and no redemption fee.
Total investment return would be reduced if the redemption fee of 0.50%
were taken into account. Total investment return for a period of less than
one year is not annualized. Past performance results shown in this report
should not be considered a representation of future performance. Investment
return will vary, and net asset value of shares, when redeemed, may be
worth more or less than their original cost.
The chart above reflects the audited operating performance, based on a share of
Fund common stock outstanding, as well as total investment return, ratios to
average net assets and other supplemental data for the periods indicated. This
information has been determined based upon information provided in the financial
statements.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
YEAR YEAR FEBRUARY 28, 1994*
ENDED ENDED THROUGH
DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- ----------------- -----------------
<S> <C> <C> <C>
INCOME FROM INVESTMENT OPERATIONS:
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ........... $ 125.94 $ 101.06 $ 100.00
-------------- -------------- --------------
Net investment loss ........................ (1.81) (1.15) (0.48)
Net realized and unrealized gain on
investments ............................ 40.17 29.19 1.54
-------------- -------------- --------------
Net increase from investment operations ........ 38.36 28.04 1.06
Distributions to shareholders from net
realized gains on investments .............. (11.65) (3.16) --
-------------- -------------- --------------
Net asset value, end of period ................. $ 152.65 $ 125.94 $ 101.06
============== ============== ==============
TOTAL INVESTMENT RETURN (a) .................... 30.64% 27.73% 1.06%
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets ........ 2.50% 2.50% 2.50%(b)
Ratio of fees and expenses waived and
reimbursed by the Adviser and
Administrator to average net assets ........ 0.28% 1.32% 10.20%(b)(c)
Ratio of net investment loss to
average net assets ......................... (1.51)% (1.36)% (1.25)%(b)
Portfolio turnover ............................. 76% 76% 9%
Net assets, end of period (in thousands) ....... $ 19,829 $ 10,789 $ 3,109
</TABLE>
- --------------------------------------------------------------------------------
*Commencement of investment operations.
(a) Total investment return is calculated assuming a purchase of common stock
at net asset value at the beginning of the period, a sale at net asset
value at the end of the period, reinvestment of all dividends and
distributions at net asset value during the period and no redemption fee.
Total investment return would be reduced if the redemption fee of 0.50%
were taken into account. Total investment return for a period of less than
one year is not annualized. Past performance results shown in this report
should not be considered a representation of future performance. Investment
return will vary, and net asset value of shares, when redeemed, may be
worth more or less than their original cost.
(b) Annualized.
(c) Includes organization expenses paid by Adviser.
The chart above reflects the audited operating performance, based on a share of
Fund common stock outstanding, as well as total investment return, ratios to
average net assets and other supplemental data for the periods indicated. This
information has been determined based upon information provided in the financial
statements.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION AND FUND DESCRIPTION
W.P. Stewart & Co. Growth Fund, Inc. (the "Fund") is an open-end,
non-diversified management investment company registered under the Investment
Company Act of 1940 (the "Act"). It was incorporated under the laws of the State
of Maryland in September 1993. The Fund invests primarily in common stocks
listed on the New York Stock Exchange. W.P. Stewart & Co., Inc., a registered
investment adviser, is the Fund's investment adviser. W.P. Stewart & Co., Inc.
assumed this responsibility from its affiliate in July, 1998. The change did not
involve any change in actual control or management of the investment adviser to
the Fund. W.P. Stewart & Co., Inc. and its predecessor are together referred to
as the "Adviser." Shares of the Fund are available for subscription by eligible
investors. There is no sales charge. The redemption fee is 0.50%.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund.
USE OF ESTIMATES: The process of preparing financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions which affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
INVESTMENT VALUATION: The Fund values its portfolio as directed by the Board of
Directors at the closing price of the New York Stock Exchange (generally 4:00
p.m. New York City time) of each business day.
In general, the Fund values its portfolio holdings as of their last available
public sale price on the valuation date, in the case of securities listed on any
established securities exchange or included in the NASDAQ National Market System
or any comparable foreign over-the-counter quotation system providing last sale
data or, if no sales of such securities are reported on such date and in the
case of over-the-counter securities not described above in this paragraph, at
the last reported bid price. In cases where securities are traded on more than
one exchange, the securities are valued on the exchange on which the securities
are principally traded. All other securities and assets are valued at fair value
as determined in good faith by or under the direction of the Board of Directors.
INVESTMENT TRANSACTIONS: All securities transactions are recorded on a trade
date basis. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses on sales of
securities are determined on the basis of identified cost.
REPURCHASE AGREEMENTS: A repurchase agreement customarily requires the seller to
repurchase the securities at a mutually agreed upon time and price. The total
amount received by the Fund on repurchase would be calculated to exceed the
price paid by the Fund, reflecting an agreed upon yield for the period of time
to the settlement (repurchase) date. The underlying securities are ordinarily
United States government securities, but may consist of other securities in
which the Fund is permitted to invest. Repurchase agreements will be fully
collateralized at all times. If the seller defaults in its obligation to
repurchase, the Fund may suffer a loss as a result of the cost in liquidating
the collateral and if the collateral declines in value.
9
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
ORGANIZATION EXPENSES: The Adviser has borne all costs and expenses associated
with the organization and initial registration of the Fund and its shares.
FEDERAL INCOME TAXES: The Fund's policy is to comply with the requirements of
the Internal Revenue Code that are applicable to registered investment companies
and to distribute all of its taxable income to its shareholders. Therefore, no
Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to pay an annual
dividend to shareholders of record representing its entire net investment income
and to distribute all of its realized net capital gains at least annually.
Distributions are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
During the year ended December 31, 1999, the Fund paid long term capital gain
distributions of $4,226,490 representing $13.00 per share.
RECLASSIFICATION OF COMPONENTS OF NET ASSETS: During the year ended December 31,
1999, the Fund reclassified certain components of net assets. The
reclassification was the result of permanent book to tax differences pertaining
to the reclassification of the current year's net operating losses of $698,803.
The reclassification resulted in a net decrease to accumulated realized gain on
investments and paid in capital of $55,038 and $643,765 respectively. Net assets
were not affected by the change.
3. RELATED PARTY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Investment Services Advisory Agreement, the Fund pays the Adviser a
fee of 1.5% of the Fund's average daily net assets, which is payable quarterly
in arrears.
In addition to the quarterly advisory fee, the Fund bears all costs and expenses
directly related to investment transactions effected and positions held for the
Fund's account, including brokerage commissions, custodial fees, interest on
borrowings and administrative fees. The Adviser has voluntarily agreed to waive
and/or reimburse expenses of the Fund so that total Fund operating expenses do
not exceed 2.5% of the average annual net assets of the Fund up to $30 million,
2% of the average annual net assets of the Fund of the next $70 million, and
1.5% of the average annual net assets of the Fund in excess of $100 million.
Such voluntary waiver and/or expense reimbursement is not required by the
Investment Advisory Services Agreement and may be discontinued at any time. In
addition, the Adviser voluntarily bears the cost of certain professional
services incurred by the Fund, including audit, legal, and other miscellaneous
expenses, although this arrangement may change in the future. The amount of the
expenses for professional services borne by the Adviser was $ 63,563 for the
year ended December 31, 1999.
Under the terms of the Investment Advisory Services Agreement, an affiliated
company of the Adviser may conduct brokerage services for the Fund. For the year
ended December 31, 1999, the Adviser's affiliate earned $93,603 in commissions
as broker on trades of portfolio securities.
Each of the directors who is not an officer or employee of the Adviser (the
"Independent Directors") is entitled to be paid by the Fund a fee of $1,250 for
each meeting that he or she attends of the Fund's Board of Directors and each
meeting of any committee of the Board of Directors on which he or she serves.
For the year ended December 31, 1999, the Fund has paid a total of $19,844 to
the Independent Directors for their services.
10
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
4. ADMINISTRATION AGREEMENT
The Fund is a party to an Administration Agreement with State Street Bank and
Trust Company (the "Administrator") dated January 11, 1994. Under that
agreement, the Administrator receives an annual fee equal to 0.08% of the Fund's
net asset value up to $125 million, 0.06% of the next $125 million, and 0.04% of
assets in excess of $250 million, subject to a minimum annual fee of $65,000.
5. INVESTMENT TRANSACTIONS
Purchases of investments and proceeds from sales of investments, excluding
short-term securities, for the year ended December 31, 1999 were $36,996,458 and
$19,552,542, respectively. As of December 31, 1999, unrealized appreciation and
depreciation for Federal income tax purposes was $18,281,766 and $453,034,
respectively. The aggregate cost of investments at December 31, 1999 for Federal
income tax purposes was $55,287,170.
6. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 100,000,000 shares of $0.001 par value capital
stock. For the Year ended December 31,1999 and the year ended December 31, 1998,
transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 YEAR ENDED DECEMBER 31, 1998
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sold ............. 113,012 $ 24,823,008 38,725 $ 7,663,593
Reinvested ....... 19,319 4,139,027 11,095 2,268,863
Redeemed ......... (25,506) (5,556,260) (27,270) (5,159,672)
------------ ------------ ------------ ------------
Net increase ..... 106,825 $ 23,405,775 22,550 $ 4,772,784
============ ============ ============ ============
</TABLE>
7. BENEFICIAL INTEREST
At December 31, 1999, no shareholder owned more than 5% of the Fund's
outstanding shares.
8. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments for which it is practicable to estimate the value,
whether or not recognized on the statement of financial condition. As a
registered investment company, the Fund's investments in securities are already
recorded at market value. The fair value of all other financial assets and
liabilities is considered to approximate the recorded value, due to the
short-term nature of the financial instruments.
9. CONCENTRATION OF RISK
At December 31, 1999, the Fund had cash at a bank in excess of federally
insurable limits and was exposed to the credit risk resulting from this
concentration of cash.
11
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
W.P. Stewart & Co. Growth Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of W.P.
Stewart & Co. Growth Fund, Inc., including the schedule of investments as of
December 31, 1999, 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 highlight for each of the five years in the
period then ended and for the period from February 28, 1994 (commencement of
investment operations) through December 31, 1994. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express and opinion on these financial statement and
financial highlights based on our audits.
We conducted our audit in accordance with generally accepted audition standards.
Those standard require that we plan and perform the audit to obtain reasonable
assurance about whether the finical statement and financial highlights are free
of material misstatement. An audit include examining, on a test basis, evidence
supporting the amounts and disclosure in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian and broker. 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 positions of W.P.
Stewart & Co. Growth Fund, Inc. as of December 31, 1999, the result of its
operation of the year then ended, the changes in its net assets for each of the
two years in the period then ended, and financial highlights of each of the five
years in the period then ended, and for the period form February 28, 1994
(commencement of investment operations) throughout December 31, 1994, in
conformity with generally accepted accounting principles.
/s/ M.R. Weiser & Co. LLP
----------------------------
CERTIFIED PUBLIC ACCOUNTANTS
Lake Success, N.Y.
February 23, 2000
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
527 MADISON AVENUE
NEW YORK, NY 10022
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Marilyn G. Breslow President and Director
John C. Russell Vice President and Director
June Eichbaum Director
William Talcott May Director
Thomas R. LeViness Director
David J. Winkler Director
Susan G. Leber Treasurer
Lisa D. Levey Secretary
Alison A. Proshan Assistant Secretary
INVESTMENT ADVISER
W.P. Stewart & Co., Inc.
527 Madison Avenue
New York, NY 10022
(212) 750-8585
ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT AUDITORS
M.R.Weiser & Co. LLP
135 West 50th Street
New York, NY 10020
LEGAL COUNSEL
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
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THIS REPORT IS NOT AUTHORIZED FOR USE AS AN OFFER OF SALE OR A SOLICITATION OF
AN OFFER TO BUY SHARES OF THE FUND UNLESS ACCOMPANIED OR PRECEDED BY THE FUND'S
CURRENT PROSPECTUS. PAST PERFORMANCE RESULTS SHOWN IN THIS REPORT SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE PERFORMANCE. INVESTMENT RETURN WILL VARY,
AND NET ASSET VALUE OF SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.
