WARBURG PINCUS JAPAN SMALL CO FUND INC
N-30D, 2001-01-08
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                                [GRAPHIC OMITTED]
                              WARBURG PINCUS FUNDS
                     PART OF CREDIT SUISSE ASSET MANAGEMENT



                                     ANNUAL
                                     REPORT
                                October 31, 2000




                                 WARBURG PINCUS
                                JAPAN GROWTH FUND

                                    (BULLET)

                                 WARBURG PINCUS
                            JAPAN SMALL COMPANY FUND


More complete  information about the Funds,  including charges and expenses,  is
provided in the  PROSPECTUS,  which must precede or accompany  this document and
which  should be read  carefully  before  investing.  You may obtain  additional
copies by calling  800-WARBURG(800-927-2874)  or by  writing  to Warburg  Pincus
Funds, P.O. Box 9030, Boston, MA 02205-9030.

Credit Suisse Asset Management Securities,  Inc., Distributor, is located at 466
Lexington  Ave.,  New York, NY  10017-3147.  Warburg Pincus Funds are advised by
Credit Suisse Asset Management, LLC.




<PAGE>

FROM TIME TO TIME, THE FUNDS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY WAIVE
SOME FEES AND/OR  REIMBURSE SOME EXPENSES,  WITHOUT WHICH  PERFORMANCE  WOULD BE
LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.


RETURNS ARE  HISTORICAL AND INCLUDE  CHANGE IN SHARE PRICE AND  REINVESTMENT  OF
DIVIDENDS AND CAPITAL GAINS.  PAST PERFORMANCE  CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.


INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS,  INCLUDING CURRENCY
FLUCTUATIONS,  LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS.


THE  VIEWS  OF THE  FUNDS'  MANAGEMENT  ARE AS OF THE  DATE OF THE  LETTERS  AND
PORTFOLIO  HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF OCTOBER 31, 2000; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.


FUND  SHARES  ARE NOT  DEPOSITS  OR OTHER  OBLIGATIONS  OF CREDIT  SUISSE  ASSET
MANAGEMENT,  LLC  ("CSAM") OR ANY  AFFILIATE,  ARE NOT FDIC  INSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE.  FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.


<PAGE>


WARBURG PINCUS JAPAN GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------
                                                                December 6, 2000

Dear Shareholder:

   For the 12 months ended October 31, 2000,  the Common Class shares of Warburg
Pincus  Japan  Growth  Fund had a loss of  40.04%,  vs. a loss of 15.14% for the
U.S.-dollar-denominated  Tokyo  Stock  Exchange  Index.  In light of the current
state of the Japanese market,  the Fund's  performance may be further  adversely
affected for periods after October 31, 2000.

   The period was a  negative  one for  Japanese  stocks.  The market  initially
rallied,  capping a very positive 1999,  with  technology  and  Internet-related
names accounting for the bulk of the gains.  However,  as 2000  progressed,  the
market turned down and the previously  favored  high-tech  names fell stunningly
out of favor. Investors, already skeptical about Japan's economic recovery, were
quick to take profits on any negative news, for example, revenue shortfalls that
were announced by leading Japanese Internet  companies.  The situation  worsened
over  the  March-through-May  span  amid a  global  selloff  in  technology  and
telecommunications  stocks. This "Nasdaq contagion" lowered investors' tolerance
for risk in general while hampering a dominant market sector in Japan.  Over the
latter part of the period,  Japan's market had occasional rallies that proved to
be false starts.

   It was obviously a very disappointing year for the Fund and its shareholders.
The  downturn in the  technology  stocks that we  continued  to focus on weighed
heavily on the Fund's return, and resulted in the Fund surrendering a large part
of the gain it generated in 1999. Certain Internet-related holdings proved to be
particular  liabilities for the 12 months.  The Fund's poor  performance for the
period  notwithstanding,  we remain  committed to investing in companies that we
believe  represent  the best of a "new  Japanese  economy."  We define  these as
companies  well-positioned  to benefit  from the spread of a Western  management
philosophy  in Japan  combined  with  rising  levels  of  information-technology
commitments.

   In  terms  of  sector   focus,   we  continued  to  emphasize  the  software,
communications and  electronic-component  areas. We believe these companies have
good long-term  prospects,  driven by such trends as increased  computer  demand
within Japan and the accelerating usage of Internet and wireless  communications
globally.

   We also maintained a large position in the financial-services sector, where a
number of companies stand to gain from Japan's expanding equity culture.  Such a
culture  is  becoming  a top  priority  due  to  extensive  underfunded  pension
liabilities. Over time, and with an eye on retirement, more and more


                                        1
<PAGE>

WARBURG PINCUS JAPAN GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

Japanese  investors  are likely to shift from safe,  but  low-yielding  bonds in
favor of equities, a lucrative area for asset-management companies. In addition,
Japan continues to see an  acceleration  of merger and acquisition  activity and
the  growth  of  venture   financing,   two  developments   driving  demand  for
financial-services companies here.

   Going forward,  we believe that certain  positive  catalysts can help Japan's
market to right itself. Japan's economic recovery, in our view, remains on track
and has good  potential to deliver  better-than-expected  news in the long-term.
Recent  encouraging  data include an upturn in Gross Domestic  Product  ("GDP"),
good  industrial  production  growth and the ongoing  creation of new jobs.  And
recent TANKAN  surveys  (conducted by the Bank of Japan)  indicate that Japanese
manufacturers have become more optimistic.

   Another    encouraging    development   is   the   above-noted    growth   of
information-technology ("IT") expenditures in Japan. We believe this will be the
true engine  pulling  the economy  forward,  as opposed to  government  spending
programs,  which can aid consumption but have little overall long-term  positive
impact. Based on our extensive contact with Japanese managements, we believe the
commitment to IT capital will remain substantial,  helping to boost productivity
and profits as it has in the U.S.

   Of course,  certain factors could continue to restrain Japan's equity market,
at least  over the near term.  Many  investors,  in  particular  foreign  (i.e.,
non-Japanese)  investors,  could remain  concerned that Japan's economic rebound
will prove temporary. Some of this concern is understandable,  especially in the
wake of the Bank of  Japan's  surprise  interest-rate  hike in  August.  News of
bankruptcies--including   the  collapse  of  a  major  Japanese   retailer  this
summer--has no doubt contributed to the skepticism.

   But all told,  we  believe  that  investors'  attention  to Japan  could well
increase  heading into next year,  especially  given the  compelling  valuations
stocks  here  currently  offer.  Most  Japanese  equities  were well below their
historic  highs  even at the end of last  year's  strong  rally.  Now,  many are
trading at very  compelling  prices,  especially  as measured  by  price-to-book
values.  We believe  that this could draw  renewed  investor  interest in Japan,
provided that the overall mix of economic and profit news remains encouraging.

   Exactly how much good news is  required  to rekindle  interest in Japan as an
asset class is uncertain.  Foreign  investors--the source of selling pressure in
Japan this year--may  remain on the sidelines until Japan logs two or three more
quarters  of GDP  growth,  for  example,  or  until  sentiment  improves  in the
technology  sector. In any event, when foreign investors do return to Japan, the
impact could be substantial. Japan remains the world's second-


                                        2
<PAGE>

WARBURG PINCUS JAPAN GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

largest economy, and stands to account for a much larger, proportionate share of
global  portfolios once investors become more confident in the market.  As ever,
we will  continue  to focus on those  companies  we believe  have the  brightest
long-term prospects.

P. Nicholas Edwards                                   Todd Jacobson
Co-Portfolio Manager                                  Co-Portfolio Manager


   INTERNATIONAL  INVESTING  ENTAILS  SPECIAL  RISK  CONSIDERATIONS,   INCLUDING
CURRENCY  FLUCTUATIONS,  LOWER  LIQUIDITY,  ECONOMIC AND  POLITICAL  RISKS,  AND
DIFFERENCES  IN  ACCOUNTING  METHODS.  THERE  ARE  ALSO  RISKS  ASSOCIATED  WITH
INVESTING IN JAPAN,  INCLUDING THE RISK OF INVESTING IN A  SINGLE-COUNTRY  FUND.
THESE ARE  DETAILED IN THE FUND'S  PROSPECTUS,  WHICH  SHOULD BE READ  CAREFULLY
BEFORE INVESTING.


                                        3
<PAGE>


WARBURG PINCUS JAPAN GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

GROWTH OF $10,000 INVESTED IN COMMON CLASS SHARES OF WARBURG PINCUS JAPAN GROWTH
                  FUND SINCE INCEPTION AS OF OCTOBER 31, 2000

   The graph below  illustrates a  hypothetical  investment of $10,000 in Common
Class shares of Warburg  Pincus Japan Growth Fund (the "Fund") from December 29,
1995 (inception) to October 31, 2000, compared to the Tokyo Stock Exchange Index
("Topix")1 for the same time period.  Past  performance  does not predict future
results.



                                [GRAPHIC OMITTED]
           EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED 10/31/00 (COMMON CLASS SHARES)
1 year                 3 year               Since Inception (12/29/95)
(40.04)%               14.30%                          8.62%

                 Fund          Tokyo Stock Exchange Index
12/29/95      $10,000.00             $10,000.00
1/31/96       $ 9,880.00             $ 9,864.70
2/29/96       $ 9,659.68             $ 9,701.14
3/31/96       $10,079.90             $10,020.90
4/30/96       $10,779.40             $10,688.40
5/31/96       $10,649.00             $10,164.80
6/30/96       $11,079.20             $10,208.30
7/31/96       $10,468.70             $ 9,706.84
8/31/96       $10,189.20             $ 9,292.84
9/30/96       $10,369.60             $ 9,554.80
10/31/96      $ 9,850.06             $ 8,913.58
11/30/96      $ 9,859.91             $ 8,979.54
12/31/96      $ 9,450.72             $ 8,291.71
1/31/97       $ 9,204.06             $ 7,402.59
2/28/97       $ 9,337.52             $ 7,549.23
3/31/97       $ 9,286.16             $ 7,272.33
4/30/97       $ 9,676.18             $ 7,450.94
5/31/97       $10,856.70             $ 8,377.39
6/30/97       $11,328.90             $ 8,920.49
7/31/97       $11,986.00             $ 8,572.95
8/31/97       $10,827.00             $ 7,809.01
9/30/97       $10,929.80             $ 7,569.67
10/31/97      $ 9,996.42             $ 6,995.28
11/30/97      $ 9,842.47             $ 6,468.54
12/31/97      $ 9,596.41             $ 5,962.70
1/31/98       $10,355.50             $ 6,600.59
2/28/98       $10,314.10             $ 6,655.50
3/31/98       $10,129.40             $ 6,207.06
4/30/98       $10,427.20             $ 6,125.43
5/31/98       $10,293.80             $ 5,838.15
6/30/98       $10,293.80             $ 5,875.92
7/31/98       $11,125.50             $ 5,798.24
8/31/98       $10,150.90             $ 5,202.18
9/30/98       $ 9,360.17             $ 5,093.46
10/31/98      $ 8,816.34             $ 5,909.94
11/30/98      $ 9,884.00             $ 6,191.25
12/31/98      $ 9,719.92             $ 6,419.09
1/31/99       $10,438.20             $ 6,451.19
2/28/99       $10,705.50             $ 6,297.65
3/31/99       $12,378.70             $ 7,144.05
4/30/99       $13,825.80             $ 7,484.11
5/31/99       $13,282.40             $ 7,148.82
6/30/99       $17,388.00             $ 7,857.98
7/31/99       $19,255.50             $ 8,659.50
8/31/99       $21,000.00             $ 8,934.87
9/30/99       $23,431.80             $ 9,521.00
10/31/99      $24,898.70             $10,086.50
11/30/99      $30,092.50             $10,817.80
12/31/99      $35,584.40             $11,336.00
1/31/00       $30,752.10             $10,754.50
2/29/00       $33,535.10             $10,551.20
3/31/00       $29,235.90             $11,221.20
4/30/00       $24,640.00             $10,297.70
5/31/00       $20,096.40             $ 9,550.08
6/30/00       $20,610.90             $10,163.20
7/31/00       $17,004.00             $ 8,963.94
8/31/00       $20,454.10             $ 9,588.73
9/30/00       $17,737.80             $ 9,212.85
10/31/00      $14,929.90             $ 8,559.66

                                                            FUND
                                                           -------
1 Year Total Return (9/30/99 to 9/30/00) .................. (24.30)%
3 Year Average Annual Total Return (9/30/97 to 9/30/00) ...  17.51%
Average Annual Total Return Since Inception
   (12/29/95 to 9/30/00) ..................................  12.78%

---------------------------
1 The  Topix is an  unmanaged  capitalization-weighted  index  (with no  defined
  investment objective) designed to reflect the general movement of the Japanese
  stock market.  The index consists of all shares listed on the First Section of
  the Tokyo Stock  Exchange,  which is  generally  reserved  for Japan's  larger
  companies.


                                        4
<PAGE>


WARBURG PINCUS JAPAN SMALL COMPANY FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------

                                                                December 6, 2000

Dear Shareholder:

   For the 12 months ended October 31, 2000,  the Common Class shares of Warburg
Pincus Japan Small  Company Fund had a loss of 41.53%,  vs. losses of 18.80% and
22.40% for the yen- and dollar-denominated JASDAQ indexes,  respectively,  and a
loss of 15.78% for the Morgan Stanley Japan Small Company Index. In light of the
current  state of the Japanese  market,  the Fund's  performance  may be further
adversely affected for periods after October 31, 2000.

   Japanese  equities  suffered a dramatic setback in the period,  with weakness
evident  across  the  market-capitalization  spectrum.  These  stocks  initially
surged, capping a very positive 1999, with technology and Internet-related names
accounting for the bulk of the gains.  However,  the market soon turned down and
the previously favored high-tech names fell stunningly out of favor.  Investors,
already skeptical about Japan's economic recovery, were quick to take profits on
any  negative  news,  for example,  revenue  shortfalls  that were  announced by
leading  Japanese   Internet   companies.   The  situation   worsened  over  the
March-through-May    span   amid   a   global    selloff   in   technology   and
telecommunications  stocks. This "Nasdaq contagion" lowered investors' tolerance
for risk in general while hampering a dominant market sector in Japan. Sentiment
toward Japanese equities remained weak through the end of the period.

   It was clearly a disappointing year for the Fund and its shareholders. It was
also a frustrating  one from a manager's  perspective,  as the turmoil  occurred
despite a general continued  improvement in Japan's economy and profit backdrop.
The Fund was hurt by the  negative  sentiment  toward Japan as an asset class in
2000 and by its focus on technology and  communications  stocks. The downturn in
the  technology  stocks  that we  continued  to focus on weighed  heavily on the
Fund's return, and resulted in the Fund surrendering a large part of the gain it
generated in 1999. Certain  Internet-related  holdings  especially  hampered the
Fund's return. The Fund's poor showing  notwithstanding,  we remain committed to
investing in companies  that we believe  represent  the best of a "new  Japanese
economy."  By which we refer not to "dot com"  companies,  but rather  companies
well-positioned to benefit from the Western management philosophy that is taking
hold in Japan combined with an increased emphasis on information technology.

   With respect to sector and industry concentration,  we continued to emphasize
the  technology  group,   defined  to  include  software,   communications   and
electronic-component  stocks.  We believe a number of these  companies have good
long-term prospects, driven by such trends as increased computer

                                        5
<PAGE>

WARBURG PINCUS JAPAN SMALL COMPANY FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

demand  within  Japan  and the  accelerating  usage  of  Internet  and  wireless
communications   globally.   We  also   maintained  a  large   position  in  the
financial-services  sector, where we believe a number of companies stand to gain
from Japan's ongoing embrace of equity investing.

   Looking  out over 2001 and  beyond,  we  believe  certain  trends  could help
Japan's market right itself and resume an upward if volatile path. One factor we
view as especially  encouraging is the growth of  information-technology  ("IT")
expenditures  in Japan.  We believe  this will be the true  engine  pulling  the
economy forward, as opposed to government  spending programs,  which can provide
temporary  benefits  while adding to long-term  debt.  Based on our contact with
Japanese  managements,   we  believe  that  the  commitment  to  IT  capital  is
increasing,  as  well  as  broadening  to  include  more  and  more  medium  and
small-sized companies.

   There  were  some  interesting  developments  in  the  period  on  the IT and
"E-Japan" front. In September,  Japan's  government  launched a potentially very
important initiative to spur IT-fueled productivity improvements.  While aspects
of the package are dubious, it contains in our view a number of useful measures.
These include  incentives for learning computer skills and the introduction,  in
2001,  of  required  computer  studies in Japanese  schools.  We expect to see a
significant  rise in  computer  sales  and  Internet  usage as a result of these
developments,  to the benefit of a number of small Japanese companies.  The plan
also has a compelling  deregulation  component,  one that should  facilitate the
growth of  business-related  e-mail while further  liberating  Japan's  domestic
telecommunications market.

   We also see grounds for optimism  regarding Japan's economy.  While projected
Gross Domestic  Product ("GDP") growth here is hardly robust,  we believe that a
steady  recovery  is on  track,  one  that  will  particularly  benefit  Japan's
domestically oriented small companies over time. Recent encouraging data include
better-than-expected  GDP numbers,  good  industrial  production  growth and the
ongoing  creation of new jobs. And recent TANKAN surveys  (conducted by the Bank
of Japan) indicate that Japanese manufacturers are becoming more optimistic.

   To be sure,  certain factors could continue to weigh on Japan's equity market
over the  near-to-intermediate  term.  Investors  could  remain  concerned  that
Japan's economic  rebound will prove  temporary.  And worries over Japan's large
debt burden could keep  investors at bay,  especially in the wake of the Bank of
Japan's  surprise  interest-rate  hike in  August  (our  view is that  sustained
economic  growth will ease Japan's debt load over the next five years, as it has
in the U.S. and Europe).


                                       6
<PAGE>

WARBURG PINCUS JAPAN SMALL COMPANY FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

   But all told, we believe that investor attention to Japan could well increase
heading into next year,  especially given the compelling  valuations stocks here
currently  offer.  Most Japanese  equities were well below their  historic highs
even at the end of last  year's  strong  rally.  Now,  many are  trading at very
compelling prices,  especially as measured by price-to-book  values.  This could
draw  renewed  investor  interest  in Japan,  provided  that the  overall mix of
economic and profit news remains encouraging.

   Exactly  what sparks a revival in Japanese  stocks,  including  the  market's
small-cap  securities,  is of course  unknown.  But when  investors,  especially
foreign (i.e.,  non-Japanese)  investors, do become more positive on Japan as an
asset  class the  potential  impact  could be  dramatic.  Japan is after all the
world's  second-largest  economy,  and in better times would  account for a much
larger,  proportionate  share of global  portfolios than it does at present.  As
ever,  we will  continue  in our  attempt  to add  value  over the long term via
careful company selection.

P. Nicholas Edwards                                  Todd Jacobson
Co-Portfolio Manager                                 Co-Portfolio Manager

   INTERNATIONAL  INVESTING  ENTAILS  SPECIAL  RISK  CONSIDERATIONS,   INCLUDING
CURRENCY  FLUCTUATIONS,  LOWER  LIQUIDITY,  ECONOMIC AND  POLITICAL  RISKS,  AND
DIFFERENCES  IN  ACCOUNTING  METHODS.  THERE  ARE  ALSO  RISKS  ASSOCIATED  WITH
INVESTING IN JAPAN,  INCLUDING THE RISK OF INVESTING IN A  SINGLE-COUNTRY  FUND.
THESE ARE  DETAILED IN THE FUND'S  PROSPECTUS,  WHICH  SHOULD BE READ  CAREFULLY
BEFORE INVESTING.


                                        7
<PAGE>


WARBURG PINCUS JAPAN SMALL COMPANY FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------

GROWTH OF $10,000 INVESTED IN COMMON CLASS SHARES OF WARBURG PINCUS JAPAN SMALL
              COMPANY FUND SINCE INCEPTION AS OF OCTOBER 31, 2000

   The graph below  illustrates a  hypothetical  investment of $10,000 in Common
Class  shares of Warburg  Pincus  Japan Small  Company  Fund (the  "Fund")  from
September  30,  1994  (inception)  to October 31,  2000,  compared to the JASDAQ
Over-The  Counter-Composite  Index  ("JASDAQ  Index")1  and the  Morgan  Stanley
Capital  International  Japan Small  Company  Index  ("MSCI")2 for the same time
period. Past performance does not predict future results.



                                [GRAPHIC OMITTED]
           EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED 10/31/00 (COMMON CLASS SHARES)
1 year           3 year         5 year            Since Inception (9/30/94)
(41.53)%         20.42%          5.23%                      2.65%

                 Fund     JASDAQ(US$)      MSCI     JASDAG(YEN)
9/30/94      $10,000.00   $10,000.00   $10,000.00   $10,000.00
Oct-94       $ 9,850.00   $ 9,901.00   $10,163.60   $ 9,698.90
Nov-94       $ 9,160.00   $ 9,126.64   $ 9,334.35   $ 9,124.92
Dec-94       $ 9,630.00   $ 9,472.36   $ 9,621.94   $ 9,548.50
Jan-95       $ 9,010.00   $ 8,669.48   $ 9,275.36   $ 8,666.98
Feb-95       $ 8,620.00   $ 8,030.11   $ 8,544.65   $ 7,845.09
Mar-95       $ 7,870.00   $ 8,419.25   $ 8,988.46   $ 7,349.44
Apr-95       $ 7,850.00   $ 8,603.88   $ 9,217.03   $ 7,304.02
May-95       $ 7,320.00   $ 8,170.25   $ 8,270.44   $ 6,987.24
Jun-95       $ 7,300.00   $ 7,949.73   $ 7,781.08   $ 6,819.48
Jul-95       $ 8,290.00   $ 8,364.87   $ 8,557.40   $ 7,440.73
Aug-95       $ 9,010.00   $ 8,079.96   $ 8,590.26   $ 7,996.11
Sep-95       $ 9,080.00   $ 8,327.77   $ 8,453.50   $ 8,300.44
Oct-95       $ 9,090.00   $ 7,930.04   $ 8,127.03   $ 8,192.29
Nov-95       $ 9,190.00   $ 7,881.82   $ 8,603.68   $ 8,085.71
Dec-95       $ 9,525.18   $ 8,149.49   $ 9,014.59   $ 8,493.63
Jan-96       $ 9,660.81   $ 8,060.33   $ 9,197.59   $ 8,706.99
Feb-96       $ 9,201.76   $ 8,046.79   $ 8,995.15   $ 8,550.18
Mar-96       $ 9,358.26   $ 8,411.15   $ 9,249.89   $ 9,075.76
Apr-96       $ 9,838.17   $ 9,085.30   $10,085.20   $ 9,615.40
May-96       $ 9,702.54   $ 8,783.04   $ 9,615.19   $ 9,593.57
Jun-96       $10,224.20   $ 8,875.96   $ 9,556.15   $ 9,836.77
Jul-96       $ 9,744.27   $ 8,597.17   $ 8,799.30   $ 9,270.47
Aug-96       $ 9,441.72   $ 8,063.11   $ 8,479.54   $ 8,846.99
Sep-96       $ 9,326.96   $ 7,773.16   $ 8,485.56   $ 8,746.67
Oct-96       $ 8,836.61   $ 7,146.10   $ 7,884.87   $ 8,211.72
Nov-96       $ 8,440.17   $ 6,729.48   $ 7,676.39   $ 7,737.99
Dec-96       $ 8,278.12   $ 6,298.12   $ 6,703.71   $ 7,386.61
Jan-97       $ 7,571.58   $ 5,650.05   $ 6,019.94   $ 6,930.11
Feb-97       $ 7,318.49   $ 5,549.70   $ 5,974.36   $ 6,768.57
Mar-97       $ 7,181.40   $ 5,159.39   $ 5,444.08   $ 6,454.85
Apr-97       $ 7,445.03   $ 5,148.30   $ 5,330.79   $ 6,602.34
May-97       $ 8,193.75   $ 5,836.16   $ 6,351.74   $ 6,872.18
Jun-97       $ 8,330.84   $ 6,081.57   $ 6,499.86   $ 7,032.23
Jul-97       $ 8,499.57   $ 5,421.05   $ 5,804.05   $ 6,484.70
Aug-97       $ 7,571.42   $ 4,744.40   $ 5,111.57   $ 5,766.13
Sep-97       $ 7,244.33   $ 4,320.58   $ 4,264.23   $ 5,270.36
Oct-97       $ 6,716.94   $ 4,235.12   $ 4,392.28   $ 5,146.46
Nov-97       $ 6,315.94   $ 3,480.42   $ 3,601.89   $ 4,487.50
Dec-97       $ 6,165.62   $ 3,305.70   $ 2,979.77   $ 4,343.18
Jan-98       $ 6,758.76   $ 3,904.37   $ 3,834.49   $ 5,002.18
Feb-98       $ 6,608.04   $ 3,854.82   $ 4,124.07   $ 4,920.64
Mar-98       $ 6,284.90   $ 3,443.36   $ 3,718.51   $ 4,639.82
Apr-98       $ 6,651.31   $ 3,445.84   $ 3,571.03   $ 4,600.66
May-98       $ 6,661.96   $ 3,290.95   $ 3,429.58   $ 4,606.92
Jun-98       $ 6,801.86   $ 3,179.38   $ 3,476.50   $ 4,457.84
Jul-98       $ 7,351.45   $ 3,212.86   $ 3,488.56   $ 4,686.93
Aug-98       $ 6,672.17   $ 2,932.38   $ 3,128.58   $ 4,183.08
Sep-98       $ 6,122.39   $ 2,849.33   $ 2,924.78   $ 3,919.46
Oct-98       $ 6,003.61   $ 3,167.86   $ 3,358.50   $ 3,729.60
Nov-98       $ 6,725.85   $ 3,487.62   $ 3,648.78   $ 4,332.12
Dec-98       $ 6,952.51   $ 3,887.31   $ 3,690.99   $ 4,430.98
Jan-99       $ 7,545.56   $ 4,047.81   $ 3,766.73   $ 4,755.77
Feb-99       $ 8,149.20   $ 4,513.84   $ 3,725.18   $ 5,411.64
Mar-99       $ 9,442.48   $ 5,351.65   $ 4,202.49   $ 6,404.84
Apr-99       $10,843.70   $ 6,061.82   $ 4,509.53   $ 7,311.76
May-99       $10,412.20   $ 5,444.60   $ 4,207.88   $ 6,701.38
Jun-99       $13,914.80   $ 7,462.32   $ 4,741.48   $ 9,127.14
Jul-99       $15,672.20   $ 8,312.27   $ 5,008.43   $ 9,640.18
Aug-99       $17,062.40   $ 9,439.42   $ 5,257.85   $10,459.20
Sep-99       $19,077.40   $10,677.90   $ 5,364.06   $11,488.50
Oct-99       $20,058.00   $11,555.60   $ 5,338.31   $12,186.80
Nov-99       $25,263.10   $13,557.00   $ 5,302.54   $13,999.10
Dec-99       $29,800.30   $14,756.70   $ 4,913.76   $15,263.70
Jan-00       $26,516.30   $15,057.90   $ 4,988.16   $16,288.40
Feb-00       $29,799.10   $17,770.70   $ 4,917.77   $19,727.70
Mar-00       $24,259.40   $16,491.70   $ 5,318.67   $17,093.20
Apr-00       $19,463.30   $14,391.00   $ 4,750.21   $15,717.20
May-00       $15,899.60   $12,358.60   $ 4,930.53   $13,448.50
Jun-00       $17,001.40   $13,258.30   $ 5,652.51   $14,176.60
Jul-00       $13,890.20   $10,194.70   $ 4,839.90   $11,289.50
Aug-00       $16,582.10   $12,095.80   $ 5,378.73   $13,035.90
Sep-00       $14,371.70   $10,779.70   $ 4,994.20   $11,772.80
Oct-00       $11,727.30   $ 8,967.59   $ 4,496.58   $ 9,896.24

                                                                  FUND
                                                                 -------
1 Year Total Return (9/30/99 to 9/30/00) .......................  (24.67)%
3 Year Average Annual Total Return (9/30/97 to 9/30/00) ........   25.66%
Average Annual Total Return Since Inception
   (9/30/94 to 9/30/00) ........................................    6.23%


---------------------------
1 The JASDAQ  Over-The-Counter  Composite  Index is an unmanaged  index (with no
  defined investment  objective)  composed of stocks traded  over-the-counter in
  Japan.
2 The Morgan Stanley Capital International Japan Small Company Index is composed
  of small-cap Japanese stocks.


                                        8
<PAGE>

WARBURG PINCUS JAPAN GROWTH FUND
SCHEDULE OF INVESTMENTS
October 31, 2000
--------------------------------------------------------------------------------

                                                     NUMBER
                                                       OF
                                                     SHARES         VALUE
                                                    --------        ------

COMMON STOCKS (95.3%)
COMMERCIAL SERVICES & SUPPLIES (3.8%)
    Trans Cosmos, Inc.                               94,500      $  6,828,743
                                                                 ------------
COMMUNICATIONS EQUIPMENT (1.6%)
    Yozan, Inc.1                                         60         2,857,502
                                                                 ------------
COMPUTERS & PERIPHERALS (3.6%)
    Obic Co., Ltd.                                   19,400         6,485,247
                                                                 ------------
DIVERSIFIED FINANCIALS (19.6%)
    Daiwa Securities Group, Inc.                    808,000         8,946,838
    Nomura Securities Co., Ltd.                     583,000        12,360,939
    Orix Corp.                                      104,700        10,979,539
    Shohkoh Fund & Co., Ltd.                         35,940         2,949,294
                                                                 ------------
                                                                   35,236,610
                                                                 ------------
DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.7%)
    Japan Telecom Co., Ltd.                             150         3,022,358
                                                                 ------------
ELECTRICAL EQUIPMENT (4.2%)
    Furukawa Electric Co., Ltd.                     287,000         7,543,896
                                                                 ------------
HEALTH CARE EQUIPMENT & SUPPLIES (7.2%)
    Hoya Corp.                                      157,000        12,969,945
                                                                 ------------
HOUSEHOLD DURABLES (5.8%)
    Sony Corp.                                      129,200        10,318,366
                                                                 ------------
INTERNET SOFTWARE & SERVICES (6.2%)
    Internet Intitiative Japan, Inc. ADR1           132,700         3,317,500
    Softbank Corp.                                  131,400         7,882,584
                                                                 ------------
                                                                   11,200,084
                                                                 ------------
IT CONSULTING & SERVICES (4.7%)
    Fujitsu Support & Service, Inc.                  70,000         8,501,068
                                                                 ------------
MEDIA (1.0%)
    Kadokawa Shoten Publishing Co., Ltd.             26,000           852,488
    Kadokawa Shoten Publishing Co., Ltd. New1        26,000           857,251
                                                                 ------------
                                                                    1,709,739
                                                                 ------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (19.1%)
    Disco Corp.                                      97,500         9,188,654
    Rohm Co., Ltd.                                   44,000        11,086,008
    Tokyo Electronics, Ltd.                         115,000         8,994,720
    Tokyo Seimitsu Co., Ltd.                         70,000         4,936,518
                                                                 ------------
                                                                   34,205,900
                                                                 ------------
SOFTWARE (7.8%)
    Konami Co., Ltd.                                165,500        13,944,975
                                                                 ------------

                 See Accompanying Notes to Financial Statements.


                                        9
<PAGE>


WARBURG PINCUS JAPAN GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

                                                     NUMBER
                                                       OF
                                                     SHARES         VALUE
                                                    --------        ------

COMMON STOCKS (CONT'D)
TECHNOLOGY HARDWARE & EQUIPMENT (2.1%)
    Seikoh Giken Co., Ltd.                           11,700      $  3,739,756
                                                                 ------------
WIRELESS TELECOMMUNICATIONS SERVICES (6.9%)
    NTT DoCoMo, Inc.                                    500        12,318,398
                                                                 ------------
TOTAL COMMON STOCKS (Cost $151,095,963)                           170,882,587
                                                                 ------------
TOTAL INVESTMENTS AT VALUE (95.3%) (Cost $151,095,963 2)          170,882,587

OTHER ASSETS IN EXCESS OF LIABILITIES (4.7%)                        8,451,474
                                                                 ------------
NET ASSETS (100.0%)                                              $179,334,061
                                                                 ============
                            INVESTMENT ABBREVIATIONS
                        ADR = American Depository Receipt
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Cost for federal income tax purposes is $151,184,296.

                 See Accompanying Notes to Financial Statements.

                                       10
<PAGE>

WARBURG PINCUS JAPAN SMALL COMPANY FUND
SCHEDULE OF INVESTMENTS
October 31, 2000
--------------------------------------------------------------------------------

                                                     NUMBER
                                                       OF
                                                     SHARES         VALUE
                                                    --------        ------

COMMON STOCKS (94.1%)
CAPITAL GOODS (3.5%)
    Funai Electric Co., Ltd.                         84,000      $  6,339,258
                                                                 ------------
COMMERCIAL SERVICES & SUPPLIES (5.1%)
    Trans Cosmos, Inc.                              125,400         9,061,633
                                                                 ------------
COMMUNICATIONS EQUIPMENT (1.6%)
    Yozan, Inc.1                                         60         2,857,502
                                                                 ------------
COMPUTERS & PERIPHERALS (5.3%)
    Obic Co., Ltd.                                   28,400         9,493,867
                                                                 ------------
DIVERSIFIED FINANCIALS (8.2%)
    Daiwa Securities Group, Inc.                    922,000        10,209,140
    Shohkoh Fund & Co., Ltd.                         55,330         4,540,468
                                                                 ------------
                                                                   14,749,608
                                                                 ------------
ELECTRICAL EQUIPMENT (12.9%)
    Megachips Corp.                                 220,000         8,643,943
    Furukawa Electric Co., Ltd.                     555,000        14,588,371
                                                                 ------------
                                                                   23,232,314
                                                                 ------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.1%)
    Seikoh Giken Co., Ltd.                            6,400         2,045,678
                                                                 ------------
HOUSEHOLD DURABLES (6.0%)
    Sony Corp.                                      136,000        10,861,438
                                                                 ------------
INTERNET SOFTWARE & SERVICES (8.4%)
    Internet Intitiative Japan, Inc. ADR1           242,900         6,072,500
    Softbank Corp.                                  150,500         9,028,378
                                                                 ------------
                                                                   15,100,878
                                                                 ------------
IT CONSULTING & SERVICES (5.4%)
    Fujitsu Support & Service, Inc.                  80,000         9,715,506
                                                                 ------------
MEDIA (1.8%)
    Kadokawa Shoten Publishing Co., Ltd.             48,000         1,573,824
    Kadokawa Shoten Publishing Co., Ltd. New1        48,000         1,582,616
                                                                 ------------
                                                                    3,156,440
                                                                 ------------
REAL ESTATE (0.0%)
    Goldcrest Co., Ltd.                                 300            28,108
                                                                 ------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (15.0%)
    Disco Corp.                                     112,600        10,611,718
    Tokyo Electronics, Ltd.                         140,000        10,950,094
    Tokyo Seimitsu Co., Ltd.                         76,400         5,387,856
                                                                 ------------
                                                                   26,949,668
                                                                 ------------
SOFTWARE (9.5%)
    Konami Co., Ltd.                                203,000        17,104,713
                                                                 ------------


                 See Accompanying Notes to Financial Statements.

                                       11
<PAGE>

WARBURG PINCUS JAPAN SMALL COMPANY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

                                                     NUMBER
                                                       OF
                                                     SHARES         VALUE
                                                    --------        ------

COMMON STOCKS (CONT'D)
SOFTWARE & SERVICES (2.2%)
    Trend Micro, Inc.1                               41,500      $  3,914,869
                                                                 ------------
SPECIALTY RETAIL (1.0%)
    Jac Holdings Co., Ltd.                           90,700         1,752,757
                                                                 ------------
WIRELESS TELECOMMUNICATIONS SERVICES (7.1%)
    NTT Mobile Communications Network, Inc.             515        12,687,951
                                                                 ------------
TOTAL COMMON STOCKS (Cost $139,032,388)                           169,052,188
                                                                 ------------
TOTAL INVESTMENTS AT VALUE (94.1%) (Cost $139,032,388 2)          169,052,188

OTHER ASSETS IN EXCESS OF LIABILITIES (5.9%)                       10,676,608
                                                                 ------------
NET ASSETS (100.0%)                                              $179,728,796
                                                                 ============
                            INVESTMENT ABBREVIATIONS
                        ADR = American Depository Receipt
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Cost for federal income tax purposes is $139,305,426.


                 See Accompanying Notes to Financial Statements.

                                       12
<PAGE>

WARBURG PINCUS JAPAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                        JAPAN GROWTH      JAPAN SMALL
                                                            FUND          COMPANY FUND
                                                        ------------      ------------
<S>                                                     <C>               <C>
ASSETS
  Investments at value (Cost $151,095,963 and
    $139,032,388, respectively)                         $170,882,587      $169,052,188
  Cash                                                        32,169             1,064
  Receivable for investments sold                         10,098,626        13,574,829
  Receivable for fund shares sold                          5,200,284         3,732,375
  Dividends and interest receivable                          202,955           195,560
  Prepaid expenses                                            98,814            72,853
                                                        ------------      ------------
    Total Assets                                         186,515,435       186,628,869
                                                        ------------      ------------
LIABILITIES
  Advisory fee payable                                        22,191               236
  Administrative service fee payable                          17,712            18,522
  Directors fees payable                                      11,582            13,396
  Loan payable                                             6,290,000         5,866,000
  Payable for fund shares redeemed                           615,617           546,113
  Distribution fees payable                                   54,693            52,353
  Accrued expenses payable                                   169,579           403,453
                                                        ------------      ------------
    Total Liabilities                                   $  7,181,374      $  6,900,073
                                                        ------------      ------------
NET ASSETS
Capital stock, $0.001 par value                               15,546            37,979
Paid-in capital                                          132,408,255        99,904,025
Accumulated net realized gain from investments and
  foreign currency related transactions                   27,153,651        49,806,884
Net unrealized appreciation from investments and
  foreign currency related transactions                   19,756,609        29,979,908
                                                        ------------      ------------
    Net Assets                                          $179,334,061      $179,728,796
                                                        ============      ============
COMMON SHARES
  Net assets                                            $177,080,299      $177,991,517
  Shares outstanding                                      15,348,229        36,492,499
                                                        ------------      ------------
  Net asset value, offering price and redemption
    price per share                                     $      11.54      $       4.88
                                                        ============      ============
ADVISOR SHARES
  Net assets                                            $  2,253,762      $  1,737,279
  Shares outstanding                                         197,384           355,482
                                                        ------------      ------------
  Net asset value, offering price and redemption
    price per share                                     $      11.42      $       4.89
                                                        ============      ============
</TABLE>


                 See Accompanying Notes to Financial Statements.

                                       13
<PAGE>

WARBURG PINCUS JAPAN FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                      JAPAN GROWTH         JAPAN SMALL
                                                                           FUND            COMPANY FUND
                                                                     -------------        -------------
<S>                                                                  <C>                  <C>
INVESTMENT INCOME:
    Dividends                                                        $   1,375,881        $   1,475,912
    Interest                                                               430,979              336,617
    Foreign Taxes Withheld                                                (206,382)            (221,387)
                                                                     -------------        -------------
      Total investment income                                            1,600,478            1,591,142
                                                                     -------------        -------------

EXPENSES:
    Investment advisory fees                                             5,839,311            7,327,621
    Administrative fees                                                    961,581            1,154,423
    Interest expense                                                     1,730,474            1,732,108
    Shareholder servicing/distribution fees                              1,180,452            1,476,771
    Transfer agent fees                                                    456,881              812,841
    Custodian/Sub-custodian fees                                           214,814              290,431
    Printing fees                                                          163,488              223,316
    Registration fees                                                      127,299               68,110
    Legal fees                                                              56,783               61,095
    Audit fees                                                              16,550               18,400
    Directors fees                                                          11,582               13,396
    Insurance expense                                                        4,512                4,887
    Miscellaneous expenses                                                  15,703               22,269
                                                                     -------------        -------------
                                                                        10,779,430           13,205,668
    Less: fees waived and transfer agent offsets                        (2,591,972)          (2,935,944)
                                                                     -------------        -------------
      Total expenses                                                     8,187,458           10,269,724
                                                                     -------------        -------------
        Net investment loss                                             (6,586,980)          (8,678,582)
                                                                     -------------        -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
  INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
  Net realized gain/(loss) from:
    Investments                                                         99,778,442          242,167,808
    Foreign currency forward transactions                              (14,594,802)         (28,828,151)
    Other foreign exchange transactions                                    988,999            1,907,917
                                                                     -------------        -------------
                                                                        86,172,639          215,247,574
                                                                     -------------        -------------
  Net change in unrealized appreciation/(depreciation) from:
    Investments                                                       (166,472,399)        (291,119,161)
    Translation of assets and liabilities in foreign currencies          1,894,177            4,811,215
                                                                     -------------        -------------
                                                                      (164,578,222)        (286,307,946)
                                                                     -------------        -------------
    Net loss on investments and foreign currency transactions          (78,405,583)         (71,060,372)
                                                                     -------------        -------------
    Net decrease in net assets resulting from operations             $ (84,992,563)       $ (79,738,954)
                                                                     =============        =============
</TABLE>

                 See Accompanying Notes to Financial Statements.


                                       14
<PAGE>

WARBURG PINCUS JAPAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                              JAPAN GROWTH FUND                   JAPAN SMALL COMPANY FUND
                                                   ------------------------------------     --------------------------------------
                                                                 FOR THE                                     FOR THE
                                                                YEAR ENDED                                 YEAR ENDED
                                                                OCTOBER 31,                                OCTOBER 31,
                                                   ------------------------------------     --------------------------------------
                                                       2000                  1999                  2000                   1999
                                                   ---------------      ---------------      ----------------     ----------------
<S>                                                <C>                  <C>                  <C>                  <C>
FROM OPERATIONS:
  Net investment loss                              $    (6,586,980)     $    (2,173,969)     $    (8,678,582)     $    (3,594,635)
  Net realized gain from investments
    and foreign currency related transactions           86,172,639            7,953,641          215,247,574           39,405,017
  Net change in unrealized appreciation
    (depreciation) from investments and
    foreign currency related translations             (164,578,222)         186,680,181         (286,307,946)         321,862,663
                                                   ---------------      ---------------      ---------------      ---------------
  Net increase (decrease) in net assets
    resulting from operations                          (84,992,563)         192,459,853          (79,738,954)          357,673,045
                                                   ---------------      ---------------      ---------------      ---------------
FROM DISTRIBUTIONS:
  Distributions from net realized gains
    Common Class shares                                (54,535,191)                   0         (160,439,960)                   0
    Advisor Class shares                                  (765,619)                   0           (1,251,909)                   0
                                                   ---------------      ---------------      ---------------      ---------------
  Net decrease in net assets from
    distributions                                      (55,300,810)                   0         (161,691,869)                   0
                                                   ---------------      ---------------      ---------------      ---------------
FROM CAPITAL SHARE TRANSACTIONS:
  Proceeds from sale of shares                       3,501,145,734        1,406,117,931        1,461,402,087        2,308,528,324
  Reinvestment of distributions                         51,303,038                    0          150,012,156                    0
  Net asset value of shares redeemed,
    net of redemption fees                          (3,761,685,250)1     (1,110,254,065)      (2,048,946,583)2     (1,844,809,099)
                                                   ---------------      ---------------      ---------------      ---------------
    Net increase (decrease) in net assets
      from capital share transactions                 (209,236,478)         295,863,866         (437,532,340)         463,719,225
                                                   ---------------      ---------------      ---------------      ---------------
    Net increase (decrease) in net assets             (349,529,851)         488,323,719         (678,963,163)         821,392,270

NET ASSETS:
  Beginning of year                                    528,863,912           40,540,193          858,691,959           37,299,689
                                                   ---------------      ---------------      ---------------      ---------------
  End of year                                      $   179,334,061      $   528,863,912      $   179,728,796      $   858,691,959
                                                   ===============      ===============      ===============      ===============
<FN>

--------------------------------------------------------------------------------
1 Includes $1,346,475 of redemption fees.
2 Includes $6,727,130 of redemption fees.
</FN>
</TABLE>

                 See Accompanying Notes to Financial Statements.

                                       15
<PAGE>

WARBURG PINCUS JAPAN GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                      2000             1999          1998           1997           1996 1
                                                    --------         --------       -------        -------        -------
<S>                                                 <C>              <C>            <C>            <C>            <C>
PER-SHARE DATA
    Net asset value, beginning of period            $  24.26         $   8.59       $  9.74        $  9.85        $ 10.00
                                                    --------         --------       -------        -------        -------
INVESTMENT ACTIVITIES:
    Net investment loss                                (0.42)           (0.10)      (0.07)2          (0.07)         (0.06)
    Net gains (losses) from investments and
      foreign currency related transactions
      (both realized and unrealized)                   (8.64)           15.77         (1.08)          0.21          (0.09)
                                                    --------         --------       -------        -------        -------
      Total from investment activities                 (9.06)           15.67         (1.15)          0.14          (0.15)
                                                    --------         --------       -------        -------        -------
LESS DIVIDENDS AND DISTRIBUTIONS:
    Dividends from net investment income                0.00             0.00          0.00          (0.20)          0.00
    Distributions from net realized gains              (3.75)            0.00          0.00           0.00           0.00
    Distributions in excess of net
      realized gains                                    0.00             0.00          0.00          (0.05)          0.00
                                                    --------         --------       -------        -------        -------
      Total dividends and distributions                (3.75)            0.00          0.00          (0.25)          0.00
                                                    --------         --------       -------        -------        -------
REDEMPTION FEES:                                        0.09             0.00          0.00           0.00           0.00
                                                    --------         --------       -------        -------        -------
NET ASSET VALUE, END OF PERIOD                      $  11.54         $  24.26       $  8.59        $  9.74        $  9.85
                                                    ========         ========       =======        =======        =======
      Total return                                    (40.04)%         182.42%       (11.81)%         1.47%         (1.50)%3

RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)            $177,080         $525,489       $40,519        $24,954        $20,157
    Ratio of expenses to average net assets 5           1.77%            1.76%         1.75%          1.75%          1.76%4
    Ratio of net investment loss to average
      net assets                                       (1.41)%          (1.32)%        (.76)%        (1.03)%        (1.03)%4
    Decrease reflected in above operating expense
      ratios due to waivers/reimbursements              0.53%            0.45%         0.53%          0.81%          1.79%4
Portfolio turnover rate                               117.59%          171.12%        75.82%         93.84%         51.72%
<FN>

--------------------------------------------------------------------------------
1 For the period December 29, 1995 (commencement of operations)  through October
  31, 1996.
2 Per share  information  is  calculated  using the average  shares  outstanding
  method.
3 Non-annualized.
4 Annualized.
5 Interest  earned on uninvested cash balances is used to offset portions of the
  transfer  agent  expense.  These  arrangements  resulted in a reduction to the
  Common Class shares' expense ratio by .02% for the year ended October 31, 2000
  and .01%,  .00%,  .00%, and .01% for the years ending October 31, 1999,  1998,
  1997 and for the period  ending  October 31,  1996,  respectively.  The Common
  Class shares'  operating  expense ratios after reflecting  these  arrangements
  were 1.75% for each of the years ended October 31, 2000,  1999, 1998, 1997 and
  for the period ending October 31, 1996.
</FN>
</TABLE>

                 See Accompanying Notes to Financial Statements.


                                       16
<PAGE>

WARBURG PINCUS JAPAN SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Year)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                      2000             1999          1998            1997           1996
                                                    --------         --------       -------        -------        --------
<S>                                                 <C>              <C>            <C>            <C>            <C>
PER-SHARE DATA
    Net asset value, beginning of year              $  18.61         $   5.57       $  6.37        $  8.47        $   9.09
                                                    --------         --------       -------        -------        --------
INVESTMENT ACTIVITIES:
    Net investment loss                                (0.24)           (0.08)        (0.01)         (1.22)          (0.23)
    Net gains (losses) from investments and
      foreign currency related transactions
      (both realized and unrealized)                   (5.74)           13.12         (0.67)         (0.79)          (0.01)
                                                    --------         --------       -------        -------        --------
      Total from investment activities                 (5.98)           13.04         (0.68)         (2.01)          (0.24)
                                                    --------         --------       -------        -------        --------
LESS DIVIDENDS AND DISTRIBUTIONS:
    Dividends from net  investment income               0.00             0.00          0.00           0.00           (0.38)
    Distributions from net realized gains              (7.93)            0.00         (0.07)         (0.09)           0.00
    Return of capital                                   0.00             0.00         (0.05)          0.00            0.00
                                                    --------         --------       -------        -------        --------
      Total dividends and distributions                (7.93)            0.00         (0.12)         (0.09)          (0.38)
                                                    --------         --------       -------        -------        --------
REDEMPTION FEES:                                        0.18             0.00          0.00           0.00            0.00
                                                    --------         --------       -------        -------        --------
NET ASSET VALUE, END OF YEAR                        $   4.88         $  18.61       $  5.57        $  6.37        $   8.47
                                                    ========         ========       =======        =======        ========
      Total return                                    (41.53)%         234.11%       (10.61)%       (23.98)%         (2.79)%

RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year
  (000s omitted)                                    $177,992         $855,282       $37,299        $41,627        $154,460
    Ratio of expenses to
      average net assets 1                              1.77%            1.76%         1.75%          1.76%           1.76%
    Ratio of net investment loss
      to average net assets                            (1.48)%          (1.25)%       (0.84)%        (1.10)%         (1.22)%
    Decrease reflected in above operating expense
      ratios due to waivers/reimbursements             (0.48)%           0.43%         0.81%          0.51%           0.29%
Portfolio turnover rate                                46.02%          249.79%       112.68%        100.60%          95.23%
<FN>
--------------------------------------------------------------------------------
1 Interest  earned on uninvested cash balances is used to offset portions of the
  transfer  agent  expense.  These  arrangements  resulted in a reduction to the
  Common Class shares' expense ratio by .02% for the year ended October 31, 2000
  and .01%,  .00%,  .01% and .01% for the years ending  October 31, 1999,  1998,
  1997 and 1996, respectively. The Common Class shares' operating expense ratios
  after  reflecting  these  arrangements  were 1.75% for each of the years ended
  October 31, 2000, 1999, 1998, 1997 and 1996.
</FN>
</TABLE>

                 See Accompanying Notes to Financial Statements.

                                       17
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
--------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

   The Warburg Pincus Japan Growth Fund ("Japan  Growth") and the Warburg Pincus
Japan Small Company Fund ("Japan Small Company"),  each a Maryland  Corporation,
are registered  under the Investment  Company Act of 1940, as amended (the "1940
Act"), as  non-diversified,  open-end management  investment  companies (each, a
"Fund" and collectively, the "Funds").

   Investment  objectives  for each  Fund are as  follows:  Japan  Growth  seeks
long-term  growth of capital and Japan Small  Company  seeks  long-term  capital
appreciation.

   Both Funds  offer two classes of shares,  one class being  referred to as the
Common Class shares and one class being referred to as the Advisor Class shares.
Common  and  Advisor  Class  shares  in each  Fund  represent  an equal pro rata
interest in such Fund,  except that they bear  different  expenses which reflect
the  difference in the range of services  provided to them.  Common Class shares
for both Funds bear  expenses  paid  pursuant  to a  shareholder  servicing  and
distribution  plan adopted by each Fund at an annual rate of .25% of the average
daily net asset value of each Fund's  outstanding  Common Class shares.  Advisor
Class shares for each Fund bear expenses paid  pursuant to a  distribution  plan
adopted by each Fund at an annual rate not to exceed  .75% of the average  daily
net asset value of each Fund's  Advisor Class  shares.  Advisor Class shares are
currently bearing expenses of .50% of average daily net assets.

   The net  asset  value of each  Fund is  determined  daily as of the  close of
regular  trading on the New York Stock  Exchange.  Each Fund's  investments  are
valued at market value,  which is generally  determined  using the last reported
sales price. If no sales are reported,  investments are generally  valued at the
most recent bid price and if there is no bid price available, at the most recent
ask price. If market quotations are not readily available,  securities and other
assets  are  valued  by  another  method  that the Board of  Directors  believes
accurately reflects fair value.

   The  books  and  records  of  the  Funds  are  maintained  in  U.S.  dollars.
Transactions  denominated  in foreign  currencies  are  recorded  at the current
prevailing  exchange rates.  All assets and  liabilities  denominated in foreign
currencies are translated into U.S. dollar amounts at the current  exchange rate
at the end of the period.  Translation gains or losses resulting from changes in
the exchange rate during the reporting  period and realized  gains and losses on
the settlement of foreign  currency  transactions are reported in the results of
operations  for the current  period.  The Funds do not isolate  that  portion of
realized gains and losses on investments in equity securities which

                                       18
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)

is due to changes in the foreign exchange rate from that which is due to changes
in market  prices of  equity  securities.  The Funds  isolate  that  portion  of
realized  gains and losses on  investments  in debt  securities  which is due to
changes in the foreign exchange rate from that which is due to changes in market
prices of debt securities.

   The  Funds  invest  in  securities  of  foreign   countries  and  governments
(primarily  Japan) which involve  certain risks in addition to those inherent in
domestic investments.  Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the  imposition  of capital or currency  controls or punitive  taxes).  Other
risks of investing in foreign  securities include liquidity and valuation risks.
In addition,  focusing investments in a single country,  such as Japan, involves
increased risks.

   Security  transactions  are  accounted  for on a trade date  basis.  Interest
income  is  recorded  on  the  accrual  basis.  Dividends  are  recorded  on the
ex-dividend  date.  Income,   expenses   (excluding   class-specific   expenses,
principally distribution and shareholder servicing fees) and realized/unrealized
gains/losses  are allocated  proportionately  to each class of shares based upon
the relative net asset value of outstanding shares. The cost of investments sold
is determined by use of the specific  identification  method for both  financial
reporting and income tax purposes.

   Dividends  from net  investment  income  and  distributions  of net  realized
capital  gains,  if any, are declared and paid at least annually for both Funds.
However,  to the extent  that a net  realized  capital  gain can be reduced by a
capital loss carryover,  such gain will not be  distributed.  Income and capital
gain  distributions  are  determined  in  accordance  with  federal  income  tax
regulations which may differ from generally accepted accounting principles.

   No provision  is made for federal  taxes,  as it is each Fund's  intention to
continue  to qualify for and elect the tax  treatment  applicable  to  regulated
investment  companies  under the Internal  Revenue Code of 1986, as amended (the
"Code"), and make the requisite  distributions to its shareholders which will be
sufficient to relieve it from federal income and excise taxes.


                                       19
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)

   Pursuant  to an  exemptive  order  issued  by  the  Securities  and  Exchange
Commission,  each Fund,  along with other Funds  advised by Credit  Suisse Asset
Management, LLC ("CSAM"), can transfer uninvested cash balances to a pooled cash
account,  which is invested in repurchase  agreements secured by U.S. government
securities.  Securities pledged as collateral for repurchase agreements are held
by the  Funds'  custodian  bank  until the  agreements  mature.  Each  agreement
requires that the market value of the collateral be sufficient to cover payments
of interest and principal; however, in the event of default or bankruptcy by the
other party to the  agreement,  retention  of the  collateral  may be subject to
legal proceedings.  At October 31, 2000, neither Fund was invested in repurchase
agreements.

   The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from these estimates.

   The Funds have an  arrangement  with their  transfer  agent whereby  interest
earned  on  uninvested  cash  balances  was used to  offset a  portion  of their
transfer agent expense.

   For  the  year  ended  October  31,  2000,  the  Funds  received  credits  or
reimbursements under this arrangement as follows:

           FUND                                                   AMOUNT
           ----                                                  --------
           Japan Growth                                          $106,355
           Japan Small Company                                    136,890

2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR

   Pursuant to Investment Advisory Agreements,  CSAM, an indirect,  wholly-owned
subsidiary of Credit Suisse  Group,  serves as investment  advisor for the Funds
described herein.

   For it's investment advisory services, CSAM receives the following fees based
on each Fund's average daily net assets:

           FUND                                ANNUAL RATE
           ------                        --------------------------------------
           Japan Growth                     1.25% of average daily net assets
           Japan Small Company              1.25% of average daily net assets


                                       20
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)

   For the year ended October 31, 2000,  investment  advisory fees and voluntary
waivers were as follows:

                                  GROSS                           NET
           FUND               ADVISORY FEE       WAIVER      ADVISORY FEE
           ----              --------------   ------------  --------------
           Japan Growth         $5,839,311    $(2,485,617)     $3,353,694
           Japan SmallCompany    7,327,621     (2,799,054)      4,528,567

   Credit Suisse Asset Management Securities,  Inc. ("CSAMSI"),  an affiliate of
CSAM, serves as co-administrator to each Fund. PFPC, Inc. ("PFPC"),  an indirect
subsidiary of PNC Financial  Services  Group,  Inc.,  also serves as each Fund's
co-administrator.  For its administrative services,  CSAMSI currently receives a
fee  calculated  at an  annual  rate of .10% of each  Fund's  average  daily net
assets. For the year ended October 31, 2000, administrative services fees earned
by CSAMSI were as follows:

           FUND                                     CO-ADMINISTRATION FEE
           ----                                     ---------------------
           Japan Growth                                  $467,145
           Japan Small Company                            586,210

   For its  administrative  services through July 31, 2000, PFPC received a fee,
exclusive of out-of-pocket expenses, based on the following fee structure:

           AVERAGE DAILY NET ASSETS                       ANNUAL RATE
           ----------------------              ---------------------------------
           First $250 million                  .12% of average daily net assets
           Next $250 million                   .10% of average daily net assets
           Next $250 million                   .08% of average daily net assets
           Over $750 million                   .05% of average daily net assets

   Effective August 1, 2000, for its  administrative  services,  PFPC receives a
fee, exclusive of out-of-pocket expenses, based on the following fee structure:

           AVERAGE DAILY NET ASSETS                       ANNUAL RATE
           ----------------------               --------------------------------
           First $500 million                   .11% of average daily net assets
           Next $1 billion                      .09% of average daily net assets
           Over $1.5 billion                    .07% of average daily net assets

   For the year ended October 31, 2000,  administrative  services fees earned by
PFPC (including out of pocket expenses) were as follows:

           FUND                                      CO-ADMINISTRATION FEE
           ----                                   ---------------------------
           Japan Growth                                   $494,436
           Japan Small Company                             568,213


                                       21
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)

   CSAMSI served as  distributor of each Fund's shares until January 1, 2000. On
January  1,  2000,  Provident  Distributors,  Inc.  ("PDI")  replaced  CSAMSI as
distributor to each Fund. On August 1, 2000,  CSAMSI replaced PDI as distributor
to each  Fund.  No  compensation  was  payable  by any of the  Funds  to PDI for
distribution  services.  Pursuant to a  distribution  plan  adopted by each Fund
pursuant  to Rule  12b-1  under  the 1940  Act,  CSAMSI  receives  a fee for its
distribution services. This fee is calculated at an annual rate of .25% and .50%
of the average  daily net assets of each Fund's  Common Class shares and Advisor
Class  shares,  respectively.  CSAMSI  may use  this fee to  compensate  service
organizations for shareholder servicing and distribution  services. For the year
ended  October 31, 2000,  shareholder  servicing and  distribution  fees were as
follows:

                                                 SHAREHOLDER SERVICING/
            FUND                                    DISTRIBUTION FEE
            ----                             ----------------------------
           Japan Growth
            Common Class shares                    $1,155,608
            Advisor Class shares                       24,844
                                                   ----------
                                                   $1,180,452
                                                   ==========
           Japan Small Company
            Common Class shares                    $1,454,662
            Advisor Class shares                       22,109
                                                   ----------
                                                   $1,476,771
                                                   ==========

3. LINE OF CREDIT

   The Funds, together with other Funds advised by CSAM, have established a $350
million  committed  and a $75  million  uncommitted,  unsecured,  line of credit
facility  ("Credit  Facility") with Deutsche Bank, AG as  administrative  agent,
State Street Bank and Trust Company as operations  agent, Bank of Nova Scotia as
syndication agent and certain other lenders, for temporary or emergency purposes
primarily relating to unanticipated  Fund share redemptions.  Under the terms of
the  Credit  Facility,  the Funds  with  access to the  Credit  Facility  pay an
aggregate  commitment  fee at a rate of .075% per annum on the entire  amount of
the Credit  Facility which is allocated  among the  participating  Funds in such
manner as is  determined  by the  governing  Boards  of the  various  Funds.  In
addition, the participating Funds will pay interest on borrowings at the Federal
funds rate plus .50%.  At October 31, 2000 and during the year ended October 31,
2000, the Funds had the following borrowings under the Credit Facility:


                                       22
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------


3. LINE OFCREDIT -- (CONT'D)
<TABLE>
<CAPTION>

                                               AVERAGE     MAXIMUM         LOAN
                               AVERAGE DAILY  INTEREST   DAILY LOAN     OUTSTANDING
           FUND                LOAN BALANCE    RATE %    OUTSTANDING   AT 10/31/2000
           ----               --------------  --------  -------------  -------------
           <S>                 <C>             <C>      <C>             <C>
           Japan Growth        $24,795,389     6.496%   $146,214,000    $6,290,000
           Japan Small Company  22,812,254     6.490%    173,637,000     5,866,000
</TABLE>


4. INVESTMENTS IN SECURITIES

   For the year  ended  October  31,  2000,  purchases  and sales of  investment
securities (excluding short-term investments) were as follows:

           FUND                                        PURCHASES        SALES
           ----                                     ------------   ------------
           Japan Growth                             $550,661,413   $747,937,541
           Japan Small Company                       276,751,000    789,611,970

   At October 31, 2000, the net unrealized  appreciation  from  investments  for
those  securities  having  an  excess  of value  over  cost  and net  unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for federal income tax purposes) were as follows:

                                       UNREALIZED    UNREALIZED  NET UNREALIZED
           FUND                       APPRECIATION  DEPRECIATION  APPRECIATION
           ----                     --------------  ------------ -------------
           Japan Growth              $45,558,560    $(25,860,269)  $19,698,291
           Japan Small Company        60,465,517     (30,718,755)   29,746,762

5. FORWARD FOREIGN CURRENCY CONTRACTS

   Each Fund may enter into forward currency  contracts for the purchase or sale
of a specific  foreign  currency  at a fixed price on a future  date.  Risks may
arise from  movements  in the value of a foreign  currency  relative to the U.S.
dollar and from the potential default of  counterparties to the contracts.  Each
Fund will enter into forward contracts  primarily for hedging purposes.  Forward
currency  contracts are adjusted by the daily  exchange  rate of the  underlying
currency and any gains or losses are recorded for financial  statement  purposes
as  unrealized  until  the  contract  settlement  date or the  date on  which an
offsetting position is entered into.

   At October 31, 2000, Japan Growth and Japan Small Company had no open forward
foreign currency contracts.


                                       23
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------


6. CAPITAL SHARE TRANSACTIONS

   Both Funds are authorized to issue three billion full and  fractional  shares
of capital stock, $.001 par value per share, of which one billion shares of each
Fund are designated  Common Class shares and two billion shares of each Fund are
designated Advisor Class shares.

   Transactions in classes of each Fund were as follows:

<TABLE>
<CAPTION>

                                                                           JAPAN GROWTH
                    -------------------------------------------------------------------------------------------------------------
                                          COMMON CLASS SHARES                                   ADVISOR CLASS SHARES
                    -------------------------------------------------------------  ----------------------------------------------
                        FOR THE YEAR ENDED               FOR THE YEAR ENDED          FOR THE YEAR ENDED       FOR THE YEAR ENDED
                         OCTOBER 31, 2000                  OCTOBER  31,1999           OCTOBER 31, 2000         OCTOBER 31,1999
                    ------------------------------   ----------------------------  ----------------------    --------------------
                        SHARES          VALUE           SHARES         VALUE        SHARES       VALUE        SHARES     VALUE
                    ------------   ---------------   -----------  ---------------  --------  ------------    -------  -----------
<S>                 <C>            <C>               <C>          <C>              <C>       <C>             <C>      <C>
Shares sold          129,177,753   $ 3,485,417,398    79,744,093  $ 1,401,756,841   547,543  $ 15,728,336    206,249  $ 4,361,090
Shares issued in
  reinvestment
  of dividends         3,470,068        50,768,758             0                0    37,405       534,280          0            0
Shares
  repurchased       (138,961,817)   (3,747,382,096)1 (62,797,016)  (1,108,802,345) (527,138)  (14,303,154)1  (69,146)  (1,451,720)
                    ------------   ---------------   -----------  ---------------  --------  ------------    -------  -----------
Net increase
(decrease)            (6,313,996)  $  (211,195,940)   16,947,077  $   292,954,496    57,810  $  1,959,462    137,103  $ 2,909,370
                    ============   ===============   ===========  ===============  ========  ============    =======  ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                         JAPAN SMALL COMPANY
                    -------------------------------------------------------------------------------------------------------------
                                          COMMON CLASS SHARES                                   ADVISOR CLASS SHARES
                    --------------------------------------------------------------  ----------------------------------------------
                        FOR THE YEAR ENDED                FOR THE YEAR ENDED          FOR THE YEAR ENDED       FOR THE YEAR ENDED
                         OCTOBER 31, 2000                   OCTOBER  31,1999           OCTOBER 31, 2000         OCTOBER 31,1999
                    ------------------------------    ----------------------------- ----------------------    --------------------
                        SHARES          VALUE            SHARES         VALUE        SHARES       VALUE        SHARES     VALUE
                    ------------   ---------------    -----------  ---------------- --------  ------------    -------  -----------
<S>                 <C>            <C>                <C>           <C>              <C>      <C>            <C>       <C>
Shares sold           71,833,920   $ 1,447,025,279     171,281,858  $ 2,303,201,289  709,514  $ 14,376,808    335,309  $ 5,327,035
Shares issued in
  reinvestment
  of dividends        22,943,279       148,923,879               0                0  167,189     1,088,277          0            0
Shares
  repurchased       (104,246,883)   (2,034,403,932)2  (132,021,198)  (1,842,311,404)(703,904)  (14,542,651)2 (152,747)  (2,497,695)
                    ------------   ---------------    ------------  ---------------  -------  ------------   --------  -----------
Net increase
  (decrease)          (9,469,684)  $  (438,454,774)     39,260,660  $   460,889,885  172,799  $    922,434    182,562  $ 2,829,340
                    ============   ===============    ============  ===============  =======  ============   ========  ===========
<FN>
--------------------------------------------------------------------------------
1 Includes  $1,342,097 and $4,378 of redemption fees for the Common Class shares
  and Advisor Class shares respectively.
2 Includes $6,682,191 and $44,939 of redemption fees for the Common Class shares
  and Advisor Class shares respectively.
</FN>
</TABLE>

                                       24
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------


6. CAPITAL SHARE TRANSACTIONS (CONT'D)

   On March 20, 2000,  the Board of Directors of the Warburg Pincus Japan Growth
Fund approved the imposition of a redemption  fee plan,  whereby 2% of the value
of shares  redeemed or exchanged  less than six months from the date of purchase
will be charged to  shareholders.  The Board also  approved on this date, a plan
whereby the redemption fee currently imposed by the Japan Small Company Fund was
increased  from 1% to 2%. These fees apply only to shares  purchased on or after
May 30, 2000 that are held for less than six months.  Reinvested  dividends  and
distributions  are not subject to the fee. The fee will be charged  based on the
value of shares at redemption,  and will be paid directly to the Fund and become
part of the Fund's daily net asset value  calculation.  When shares are redeemed
that are subject to the fee,  reinvested  dividends  and  distributions  will be
redeemed first, followed by the shares held longest.


7. RECLASSIFICATION OF COMPOSITION OF NET ASSETS

   At October  31,  2000,  accumulated  undistributed  net  investment  loss and
accumulated  net realized gain from  investments  and foreign  currency  related
transactions   have  been  adjusted  for  current  period   permanent   book/tax
differences.  The  Japan  Growth  and Japan  Small  Company  Funds  reclassified
($6,586,980) and ($8,678,582)  respectively,  from accumulated undistributed net
investment  loss to accumulated  net realized gain from  investments and foreign
currency related transactions.


                                       25
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

7. OTHER FINANCIAL HIGHLIGHTS

   Each Fund  currently  offers one other  class of shares,  the  Advisor  Class
shares,  representing  equal pro rata  interests  in each  Fund.  The  financial
highlights for an Advisor Class share of each Fund are as follows:
<TABLE>
<CAPTION>

                                                                                 JAPAN GROWTH
                                                    ---------------------------------------------------------------------
                                                                            ADVISOR CLASS SHARES
                                                    ---------------------------------------------------------------------
                                                     2000              1999          1998            1997          1996 1
                                                    --------         --------       -------        -------        -------
<S>                                                 <C>              <C>            <C>            <C>            <C>
PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD                $  24.18         $   8.71       $  9.89        $  9.83        $ 10.00
                                                    --------         --------       -------        -------        -------
INVESTMENT ACTIVITIES:
    Net investment income (loss)                       (0.42)           (0.06)        (0.11)2         0.05          (0.09)
    Net gains (losses) from investments
      and foreign currency related transactions
      (both realized and unrealized)                   (8.63)           15.53         (1.07)          0.01          (0.08)
                                                    --------         --------       -------        -------        -------
      Total from investment activities                 (9.05)           15.47         (1.18)          0.06          (0.17)
                                                    --------         --------       -------        -------        -------
LESS DISTRIBUTIONS:
    Distributions from net realized gains              (3.73)            0.00          0.00           0.00           0.00
                                                    --------         --------       -------        -------        -------
      Total distributions                              (3.73)            0.00          0.00           0.00           0.00
                                                    --------         --------       -------        -------        -------
REDEMPTION FEES:                                        0.02             0.00          0.00           0.00           0.00
                                                    --------         --------       -------        -------        -------
NET ASSET VALUE, END OF PERIOD:                     $  11.42         $  24.18       $  8.71        $  9.89        $  9.83
                                                    ========         ========       =======        =======        =======
      Total return                                    (40.47)%         177.61%       (11.93)%         0.61%       (1.70)%3

RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)            $  2,254         $  3,375       $    22        $    17        $     1
    Ratio of expenses to average net assets 5           2.02%            2.01%         2.00%          2.00%          2.00%4
    Ratio of net loss to average net assets            (1.66)%          (1.55)%       (1.11)%        (1.42)%        (1.08)%4
    Decrease reflected in above
      operating expense ratios
      due to waivers/reimbursements                     0.58%            0.54%         0.58%          7.25%          3.43%4
Portfolio turnover rate                               117.59%          171.12%        75.82%         93.84%         51.72%3

<FN>
--------------------------------------------------------------------------------

1 For the period December 29, 1995 (commencement of operations)  through October
  31, 1996.
2 Per share  information  is  calculated  using the average  shares  outstanding
  method.
3 Non annualized.
4 Annualized.
5 Interest  earned on uninvested cash balances is used to offset portions of the
  transfer  agent  expense.  These  arrangements  resulted in a reduction to the
  Advisor  Class  shares'  expense  ratio by .02% for the year ended October 31,
  2000 and .01%,  .00%,  .00% and .00% for the years  ending  October 31,  1999,
  1998,  1997 and for the period  ending  October 31,  1996,  respectively.  The
  Advisor  Class  shares'   operating  expense  ratios  after  reflecting  these
  arrangements  were 2.00% for each of the years ended  October 31, 2000,  1999,
  1998, 1997 and for the period ending October 31, 1996.
</FN>
</TABLE>

                                       26
<PAGE>

WARBURG PINCUS JAPAN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------

7. OTHER FINANCIAL HIGHLIGHTS -- (CONT'D)
<TABLE>
<CAPTION>

                                                                             JAPAN SMALL COMPANY
                                                    ---------------------------------------------------------------------
                                                                              ADVISOR CLASS SHARES
                                                    ---------------------------------------------------------------------
                                                       2000            1999           1998           1997           1996
                                                    --------         --------       -------        -------        -------
<S>                                                 <C>              <C>            <C>            <C>            <C>
PER-SHARE DATA
Net asset value, beginning of year                  $  18.66         $   5.57       $  6.37        $  8.45        $  9.08
                                                    --------         --------       -------        -------        -------
INVESTMENT ACTIVITIES:
    Net investment income (loss)                       (0.22)           (0.06)        (0.62)          0.35          (0.13)
    Net gains (losses) from investments
      and foreign currency related transactions
      (both realized and unrealized)                   (5.81)           13.15         (0.06)         (2.43)         (0.14)
                                                    --------         --------       -------        -------        -------
      Total from investment activities                 (6.03)           13.09         (0.68)         (2.08)         (0.27)
                                                    --------         --------       -------        -------        -------

LESS DIVIDENDS AND DISTRIBUTIONS:
    Dividends from net investment  income               0.00             0.00          0.00           0.00          (0.36)
    Distributions from net  realized gains             (7.87)            0.00         (0.07)          0.00           0.00
    Return of capital                                   0.00             0.00         (0.05)          0.00           0.00
                                                    --------         --------       -------        -------        -------
      Total dividends and distributions                (7.87)            0.00         (0.12)          0.00          (0.36)
                                                    --------         --------       -------        -------        -------
REDEMPTION FEES:                                        0.13             0.00          0.00           0.00           0.00
                                                    --------         --------       -------        -------        -------
NET ASSET VALUE, END OF YEAR:                       $   4.89         $  18.66       $  5.57        $  6.37        $  8.45
                                                    ========         ========       =======        =======        =======
      Total return                                    (41.99)%         235.01%       (10.63)%       (24.62)%        (3.17)%

RATIOS AND SUPPLEMENTAL DATA:
Net assets,  end of year  (000s  omitted)           $  1,737         $  3,410       $     1        $     3        $     1
    Ratio  of expenses  to average net  assets 1        2.02%            2.01%         2.01%          2.00%          2.01%
    Ratio of net loss to average net assets             1.75%           (1.53)%       (1.18)%        (1.10)%        (1.57)%
    Decrease reflected in above operating expense
      ratios due to waivers/reimbursements              0.53%            0.51%        22.81%          6.69%          0.28%
Portfolio turnover rate                                46.02%          249.79%       112.68%        100.60%         95.23%

<FN>
--------------------------------------------------------------------------------
1 Interest  earned on uninvested cash balances is used to offset portions of the
  transfer  agent  expense.  These  arrangements  resulted in a reduction to the
  Advisor  Class shares'  expenses  ratio by .02% for the year ended October 31,
  2000 and .01%,  .01%,  .00% and .01% for the years  ending  October 31,  1999,
  1998, 1997 and 1996, respectively.  TheAdvisor Class shares' operating expense
  ratios after  reflecting these  arrangements  were 2.00% for each of the years
  ended October 31, 2000, 1999, 1998, 1997 and 1996.
</FN>
</TABLE>

                                       27
<PAGE>

WARBURG PINCUS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS

--------------------------------------------------------------------------------

To the Board of Directors and Shareholders of

WARBURG, PINCUS JAPAN GROWTH FUND, INC.;
WARBURG, PINCUS JAPAN SMALL COMPANY FUND, INC.:

In our opinion, the accompanying statements of assets and liabilities, including
the schedules of  investments,  and the related  statements of operations and of
changes  in net assets  and the  financial  highlights  present  fairly,  in all
material  respects the  financial  position of the Warburg,  Pincus Japan Growth
Fund,  Inc.  and Warburg,  Pincus Japan Small  Company  Fund,  Inc.,  (all funds
collectively  referred to as the  "Funds") at October 31,  2000,  the results of
each of their  operations for the year then ended,  the changes in each of their
net  assets  for each of the two  years  in the  period  then  ended  and  their
financial highlights for each of the years (or periods) presented, in conformity
with accounting  principles  generally accepted in the United States of America.
These financial  statements and financial  highlights  (hereafter referred to as
"financial  statements") are the  responsibility of the Funds'  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audits. We conducted our audits of these financial  statements in accordance
with  auditing  standards  generally  accepted in the United  States of America,
which require that we plan and perform the audit to obtain reasonable  assurance
about whether the financial  statements  are free of material  misstatement.  An
audit includes examining,  on a test basis,  evidence supporting the amounts and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.  We believe that our audits,  which included
confirmation  of  securities  at October  31,  2000 by  correspondence  with the
custodian and brokers, provide a reasonable basis for our opinion.


PRICEWATERHOUSECOOPERS LLP


Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania
December 15, 2000



                                       28
<PAGE>


WARBURG PINCUS JAPAN FUNDS
SHAREHOLDER TAX INFORMATION (UNAUDITED)

--------------------------------------------------------------------------------

   Each Fund is required by  Subchapter M of the Internal  Revenue Code of 1986,
as amended, to advise its shareholders within 60 days of each Fund's fiscal year
end as to the U.S.  federal tax status of  distributions  received by the Fund's
shareholders  in  respect of such  fiscal  year.  During  the fiscal  year ended
October 31, 2000, the following  dividends and distributions per share were paid
by each of the Funds:

                             ORDINARY        FOREIGN SOURCE      FOREIGN TAXES
                              INCOME             INCOME        PAID OR WITHHELD
FUND                         PER SHARE          PER SHARE          PER SHARE
----                         --------         -------------       -------------
PAYMENT DATE                 12/07/99

Japan Growth Fund
      Common shares          $0.1148             $0.0048           $0.0028
      Advisor shares          0.1148              0.0039            0.0028

Japan Small Company Fund
      Common shares           0.0486              0.0069            0.0030
      Advisor shares          0.0536              0.0067            0.0030



   The above  information  was  provided to  calendar  year  taxpayers  via Form
1099-DIV mailed in January of 2000.

                        ORDINARY     LONG-TERM  FOREIGN SOURCE   FOREIGN TAXES
                         INCOME    CAPITAL GAINS    INCOME     PAID OR WITHHELD
FUND                    PER SHARE    PER SHARE     PER SHARE       PER SHARE
----                    ----------  -----------  -------------    -------------
      PAYMENT DATE      08/14/00     08/14/00

Japan Growth Fund
      Common shares     $3.0675       $0.5721       $0.0783         $0.0123
      Advisor shares     3.0385        0.5721        0.0781          0.0123

Japan Small Company Fund
      Common shares      7.8425        0.0344        0.0612          0.0097
      Advisor shares     7.7850        0.0344        0.0607          0.0097

   Because  the  fiscal  year  of the  Funds  is not a  calendar  year,  another
notification  will be sent with  respect  to  calendar  year  2000.  The  second
notification,  which  will  reflect  the  amount  to be  used by  calendar  year
taxpayers on their U.S. federal income tax returns,  will be made in conjunction
with form 1099-DIV and will be mailed in January 2001.

                                       29
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<PAGE>


                                [GRAPHIC OMITTED]
                              WARBURG PINCUS FUNDS
                     PART OF CREDIT SUISSE ASSET MANAGEMENT



                      P.O. BOX 9030, BOSTON, MA 02205-9030
               800-WARBURG (800-927-2874) (BULLET) www.warburg.com

CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR.       WPJPN-2-1000



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