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SIGNATURE A. S. FILEAN
TITLE VICE PRES & SEC'Y
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Report of Independent Auditors on Internal Control
The Board of Directors and Shareholders
Princor Growth Fund, Inc.
In planning and performing our audit of the financial statements of Princor
Growth Fund, Inc. for the year ended October 31, 1997, we considered its
internal control, including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on internal control.
The management of Princor Growth Fund, Inc. is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs. Generally, controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes that are
fairly presented in conformity with generally accepted accounting principles.
These controls include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of specific
internal control components does not reduce to a relatively low level the risk
that errors or irregularities in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
control for activities safeguarding securities, that we consider to be material
weaknesses as defined above as of October 31, 1997.
This report is intended solely for the information and use of management and the
Board of Directors of Princor Growth Fund, Inc. and the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Des Moines, Iowa
November 26, 1997
SPECIAL MEETING OF SHAREHOLDERS PRINCOR GROWTH FUND, INC.
HELD SEPTEMBER 16, 1997
1.Election of the Board of Directors.
For Withheld
Davis 3,701,772 76,828
Ehrle 3,700,176 78,424
Ferguson 3,703,462 75,138
Gilbert 3,702,760 75,840
Griswell 3,693,088 85,512
Jones 3,701,245 77,355
Keller 3,699,325 79,275
Lukavsky 3,698,811 79,789
Peebler 3,693,840 84,760
2.Ratification of selection of Ernst & Young LLP as independent public
auditors.
In Favor Opposed Abstain
3,655,638 27,049 95,914
3.Approval of name change to Principal Growth Fund, Inc.
In Favor Opposed Abstain
3,540,950 136,289 101,361
4.Approval of modification of management agreement.
In Favor Opposed Abstain
3,357,347 274,372 146,881
5.Approval to eliminate the fundamental investment restriction regarding the
purchase of shares of other investment companies.
In Favor Opposed Abstain Broker Non-Votes
3,421,585 99,129 132,866 125,019
