------------------
59TH Annual Report
SELIGMAN
GROWTH
FUND, INC.
December 31, 1995
Seligman Financial Services, Inc.
an affiliate of
[Logo]
J. & W. Seligman & Co.
incorporated
established 1864
100 Park Avenue, New York, NY 10017
[Logo]
This report is intended only for
the information of shareholders or those
who have received the offering -------------------
prospectus covering shares of Capital
Stock of Seligman Growth Fund, Inc., A Growth Stock Fund
which contains information about the Established in 1937
sales charges, management fee, and other
costs. Please read the prospectus
carefully before investing or sending
money.
EQGR2 12/95
<PAGE>
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SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
A mutual fund that seeks to provide
longer-term growth in capital value for
its shareholders and an increase in
future income. The Fund invests
primarily in the common stocks of
companies selected for their growth
prospects.
HIGHLIGHTS OF 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------- -----------------------
CLASS A CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets (in thousands)............................ $597,510 $6,412 $513,328 $1,742
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share............................ $5.22 $4.96 $4.54 $4.38
With December 1995 Gain Distribution
Taken in Shares.................................. 5.82 5.56 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares..................... 28.19%(1) 27.01% -- --
- ----------------------------------------------------------------------------------------------------------------------
Dividends Paid per Share............................. $0.01 -- $0.01 --
Distribution of Realized Gain per Share.............. 0.598 $0.598 $0.50 $0.50
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of Average Net Assets...... $0.0094 $0.0191 $0.0090 $0.0293
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding effect of dividend paid.
1
<PAGE>
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To the Shareholders
- --------------------------------------------------------------------------------
Your Fund performed favorably during the past year, though its performance
trailed the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P
500's total return was driven by better-than-average advances by the companies
with the largest market capitalizations, and therefore heaviest weightings, in
the Index. As a result, the S&P 500 outperformed more than 87% of the US equity
funds. Long-term performance results and an interview with your Portfolio
Manager begin on page 3.
For Class A and D shares, net realized gain per share from investment
transactions for the 12 months totaled $0.68. Net unrealized gain per share
totaled $1.22 at December 31. A realized gain distribution of $0.598 was paid on
December 27 to shareholders of record December 21. The US equity markets had a
banner year. After a pessimistic start, many factors including low inflation,
falling interest rates, and strong corporate earnings paved the way for a
memorable year.
Overall, the market indices tell the best story. The S&P 500, which had its
second best gain since 1957, was up 34.11%, and other indices such as the New
York Stock Exchange Composite and the Wilshire 5000 were up 30% or more for the
year. The leading market indices have only twice, since the end of World War II,
risen more than 1995's powerful advance.
The equity markets, however, did teeter towards the end of the year due to
the Federal budget stalemate between the White House and Congress, which brought
on fears of higher inflation and interest rates. Nevertheless, the deadlock in
Washington did not deter the Federal Reserve Board from lowering short-term
interest rates on December 19--a move that quickly rejuvenated the equity
markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. We remain optimistic about your Fund's
performance and will continue to search for, and invest in, those companies that
can sustain earnings growth in a challenging and competitive global business
environment--a strategy we believe is key to investment performance.
As of January 1, 1996, the portfolio management responsibilities of
Seligman Growth Fund have been fully assumed by Mr. Loris D. Muzzatti. Mr.
Muzzatti is supported by a group of investment professionals dedicated to the
objectives of Seligman Growth Fund.
A Special Meeting of Shareholders was held on December 12, at which several
proposals were voted on. The results of the Special Meeting appear on page 6.
We thank you for your continued investment in Seligman Growth Fund, and
look forward to serving your investment needs in 1996 and the years ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 2, 1996
2
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ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Growth Fund, and a comparison chart and table of your Fund's
performance against the Standard & Poor's 500 Composite Stock Price Index and
the Lipper Growth Fund Average.
YOUR PORTFOLIO MANAGER
After 38 successful years with the firm, David
Watts, Managing Director of J. & W. Seligman & Co.
Incorporated and Vice President and Portfolio
Manager of Seligman Growth Fund, has retired. At
year end, Loris D. Muzzatti, Managing Director of J.
& W. Seligman & Co. Incorporated and Vice President
and Portfolio Manager of Seligman Capital Fund and
Portfolio Manager of the Seligman Capital Portfolio
Photo of Seligman Portfolios, Inc. was appointed Vice
of Loris D. Muzzatti President, and assumed full portfolio management
responsibilities, of Seligman Growth Fund. Mr.
Muzzatti, who joined Seligman in 1985, also manages
the US portion of Seligman Henderson Global Growth
Opportunities Fund and a portion of the firm's
institutional accounts. Mr. Muzzatti is assisted by
a team of investment professionals who are dedicated
to the growth investment discipline, and to the
objectives of Seligman Growth Fund.
Iain C. Clark, Chief Investment Officer of Seligman
Henderson Co., is responsible for the investment activities of Seligman Growth
Fund's Subadviser, Seligman Henderson Co. Mr. Clark is also head of
International Investments for, and a Director of, Henderson Administration Group
plc, an investment manager in London, England. He has been with Henderson since
1985.
Your Manager's Investment Strategy
"DURING THE YEAR, YOUR FUND'S EXPOSURE TO HEALTH CARE ISSUES WAS INCREASED. IN
PARTICULAR, WE PURCHASED HMO AND PHARMACEUTICAL ISSUES THAT BENEFITED FROM GOOD
HMO ENROLLMENT GROWTH WHICH, IN TURN, RESULTED IN INCREASED PHARMACEUTICAL USE.
ALSO, THE UTILITY SECTOR WAS UP MORE THAN 40% IN 1995, BUT THIS SECTOR WAS NOT
REPRESENTED IN THE PORTFOLIO TO ANY EXTENT. SHARPLY LOWER INTEREST RATES DURING
THE YEAR HELPED THIS YIELD-ORIENTED SECTOR POST SUPERIOR PERFORMANCE; HOWEVER, A
LACK OF ANY SIGNIFICANT EARNINGS GROWTH IN THE UTILITY SECTOR WILL GENERALLY
PRECLUDE YOUR FUND FROM OWNING THESE ISSUES."
Economic Factors Affecting Seligman Growth Fund
"MODERATE INFLATION AND DECLINING INTEREST RATES WERE TWO MAJOR FACTORS THAT
POSITIVELY IMPACTED YOUR FUND'S PERFORMANCE IN 1995. IN ADDITION, STRONG GROWTH
IN CORPORATE PROFITS CONTRIBUTED TO A FAVORABLE ECONOMIC ENVIRONMENT FOR THE US
EQUITY MARKETS. THESE FACTORS BENEFITED YOUR FUND'S INTEREST-SENSITIVE FINANCIAL
ISSUES. ON THE OTHER HAND, THE STRENGTH OF THE US DOLLAR DAMPENED YOUR FUND'S
INTERNATIONAL HOLDINGS, AS DID THE LESS-FAVORABLE OVERSEAS ECONOMIC
ENVIRONMENT."
Individual Sector Performance
"YOUR FUND'S FINANCIAL, HEALTH CARE, AND CONSUMER STAPLES SECTORS ALL PERFORMED
FAVORABLY DURING THE YEAR. IN PARTICULAR, THE HEALTH CARE SECTOR'S PERFORMANCE
WAS LARGELY DRIVEN BY THE STRENGTH OF PHARMACEUTICAL ISSUES. THESE ISSUES
CONTINUED TO REBOUND FROM THEIR LOWS POSTED IN JUNE 1994--A RESULT OF STRONG
UNIT GROWTH. CONVERSELY, THE CONSUMER CYCLICAL SECTOR, MORE SPECIFICALLY
RETAILERS, PERFORMED POORLY AS A RESULT OF WEAK SALES IN GENERAL AND A
PARTICULARLY DOWNHEARTED HOLIDAY SEASON."
Outlook for the Year Ahead
"GOING FORWARD, WE MAY SEE AN ECONOMIC SLOWDOWN THAT WOULD REDUCE CORPORATE
PROFITS FOR THE S&P 500. YOUR FUND IS WELL POSITIONED TO BENEFIT IN THIS
ENVIRONMENT WITH ITS PORTFOLIO OF SUPERIOR GROWTH STOCKS. IN ADDITION, YOUR
FUND'S EXPOSURE TO THE INTERNATIONAL MARKETS, WHICH DAMPENED PERFORMANCE IN
1995, IS EXPECTED TO PROVIDE BETTER RESULTS IN 1996."
3
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PERFORMANCE COMPARISON CHART AND TABLE December 31, 1995
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Growth
Fund Class A shares, with and without the maximum initial sales charge of 4.75%,
for the 10-year period ended December 31, 1995, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Growth Fund Average (Lipper Growth) for the same period. The
performance of Seligman Growth Fund Class D shares is not shown in this chart,
but is included in the table below. It is important to keep in mind that the S&P
500 excludes the effect of any fees or sales charges, and the Lipper Growth
excludes the effects of any sales charges.
<TABLE>
<CAPTION>
Growth Fund With Sales Charge Growth Fund Without Sales Charge S&P 500 Index Lipper Growth Funds Average
<S> <C> <C> <C> <C>
12/31/85 9531.98 10000 10000 10000.00
3/31/86 11299.12 11853.9 11410.50 11500.00
6/30/86 12366.25 12973.42 12083.03 12108.35
9/30/86 10308.09 10814.21 11240.12 11051.29
12/31/86 11081.1 11625.18 11866.53 11472.35
3/31/87 13571.7 14238.08 14400.28 13844.83
6/30/87 14034.17 14723.25 15123.17 14186.79
9/30/87 14672.09 15392.49 16120.85 15066.37
12/31/87 11463.33 12026.17 12489.63 11845.18
3/31/88 11598.83 12168.33 13200.78 12734.76
6/30/88 12466.38 13078.48 14079.96 13470.83
9/30/88 12166.32 12763.68 14127.69 13384.61
12/31/88 12305.16 12909.34 14563.81 13585.38
3/31/89 13035.6 13675.64 15596.38 14570.32
6/30/89 14439.86 15148.85 16973.08 15762.17
9/30/89 16591.68 17406.33 18790.72 17401.44
12/31/89 16457.4 17265.46 19178.56 17265.71
3/31/90 15586.13 16351.4 18601.67 16884.14
6/30/90 17231.87 18077.95 19771.90 18109.93
9/30/90 14072.15 14763.09 17054.65 15246.75
12/31/90 15607.88 16374.23 18583.43 16512.23
3/31/91 18442.58 19348.1 21282.86 19451.40
6/30/91 18305.96 19204.78 21234.12 19270.50
9/30/91 19780.04 20751.23 22369.72 20706.16
12/31/91 21609.51 22670.53 24245.20 22623.55
3/31/92 21173.69 22213.31 23632.77 22370.16
6/30/92 20120.92 21108.85 24082.26 21810.91
9/30/92 21358.01 22406.68 24841.58 22478.32
12/31/92 24050.5 25231.37 26092.60 24501.37
3/31/93 23931.04 25106.05 27232.06 25126.16
6/30/93 23174.97 24312.86 27364.68 25291.99
9/30/93 25249.15 26488.88 28072.06 26523.71
12/31/93 25540.49 26794.52 28722.49 27133.76
3/31/94 24617.93 25826.66 27633.33 26224.77
6/30/94 23306.91 24451.27 27749.67 25553.42
9/30/94 24763.6 25979.48 29106.35 26943.53
12/31/94 24559.6 25765.46 29101.69 26590.57
3/31/95 25695.61 26957.25 31935.32 28550.29
6/30/95 27588.98 28943.58 34983.87 31262.57
9/30/95 30347.87 31837.93 37764.04 33960.53
12/31/95 31552.56 33101.77 40037.43 34762.00
</TABLE>
The table below shows the average annual total returns for the one-, five-, and
10-year periods through December 31, 1995, for the Seligman Growth Fund Class A
shares, with and without the maximum initial sales charge of 4.75%, the S&P 500,
and the Lipper Growth. Also included in the table are the average annual total
returns for the one-year and since-inception periods through December 31, 1995,
for the Seligman Growth Fund Class D shares, with and without the effect of the
1% contingent deferred sales load ("CDSL") imposed on shares redeemed within one
year of purchase, the S&P 500, and the Lipper Growth.
AVERAGE ANNUAL TOTAL RETURN
ONE FIVE 10
YEAR YEARS YEARS
-------- --------- ---------
Seligman Growth Fund
Class A with sales charge 22.28% 13.99% 12.18%
Class A without sales charge 28.47 15.12 12.72
S&P 500 37.58 16.59 14.86
Lipper Growth 30.73 16.05 13.27
SINCE
ONE INCEPTION
YEAR 5/3/93
------- ---------
Seligman Growth Fund
Class D with CDSL 26.01% n/a
Class D without CDSL 27.01 11.43%
S&P 500 37.58 16.62*
Lipper Growth 30.73 14.51*
* From 4/30/93.
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders. Performance data quoted represent changes in
price and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
4
<PAGE>
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SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION FOR 1995 DIVIDEND AND GAIN DISTRIBUTION FOR TAXABLE
ACCOUNTS
The dividend of $0.01 per share, paid on December 27, 1995, to Class A
shareholders, is taxable as ordinary income for federal tax purposes. It makes
no difference whether you received it in cash or in shares. Under the Internal
Revenue Code, 55% of the dividend paid to Class A shareholders has been
designated as qualifying for the dividend received deduction available to
corporate shareholders. In order to claim the dividend received deduction for
this distribution, corporate shareholders must have held the Fund's shares for
at least 46 days.
A distribution of $0.598 per share, consisting of $0.574 from net long-term
and $0.024 from net short-term gain realized on investments in 1995, was paid on
December 27, 1995, to both Class A and D shareholders. The distribution from net
long-term gain is designated as a "capital gain dividend" for federal income tax
purposes and is taxable to shareholders in 1995 as a long-term gain from the
sale of capital assets, no matter how long the shares may have been owned or
whether the distribution was paid in additional shares or cash. However, if
shares on which a capital gain distribution was received are subsequently sold,
and such shares were held for six months or less from the date of purchase, any
loss would be treated as long-term to the extent it offsets the long-term gain
distribution. Net short-term gain is taxable as ordinary income whether paid to
you in cash or shares.
If the gain distribution was received in shares, the per share cost basis
for federal income tax purposes was $5.18 for Class A and $4.92 for Class D.
A year-end statement of account showing activity for 1995 and a combined
Form 1099-DIV/B have been mailed to each shareholder. Form 1099-B shows the
proceeds of any redemptions paid to shareholders during the year and reported to
the Internal Revenue Service as required by federal regulations. Form 1099-DIV
shows the amount of the dividend and distribution from gain on investments paid
during the year.
5
<PAGE>
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SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
PROXY RESULTS
Seligman Growth Fund Shareholders voted on the following proposals at the
Special Meeting of Shareholders held on December 12, 1995, in New York, New
York. Each Director was elected, and all other proposals were approved. The
description of each proposal and number of shares voted are as follows:
FOR AGAINST NON-VOTE
----- ---------- ------------
Election of Directors:
Fred E. Brown 67,455,287 2,730,217 36,646,940
John R. Galvin 67,256,368 2,873,618 36,645,949
Alice S. Ilchman 67,498,741 2,739,834 36,646,925
Frank A. McPherson 67,334,490 2,834,446 36,648,938
John E. Merow 67,284,803 2,920,029 36,638,791
Betsy S. Michel 67,713,435 2,575,953 36,649,252
William C. Morris 67,707,714 2,596,558 36,649,254
James C. Pitney 67,739,484 2,558,852 36,641,104
James Q. Riordan 67,720,815 2,550,584 36,641,103
Ronald T. Schroeder 67,786,994 2,522,438 36,619,249
Robert L. Shafer 67,762,057 2,546,635 36,649,250
James N. Whitson 67,758,187 2,555,944 36,638,755
Brian T. Zino 67,693,368 2,606,917 36,649,253
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
----- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Ratification of Deloitte & Touche LLP
as independent auditors: 66,441,703 1,192,037 2,678,775 36,649,244
Approval of amendment to the Management
Agreement to increase management fee
payable by the Fund: 49,797,388 16,413,554 4,102,072 36,648,745
Approval of amendment to the Subadvisory
Agreement to increase the subadvisory fee
payable by J. & W. Seligman & Co. Incorporated: 49,760,584 16,140,986 4,410,944 36,649,245
Approval of amendment of the Fund's fundamental
investment policy to permit mortgaging
or pledging of its assets: 53,598,913 10,936,401 5,777,203 36,649,243
Approval of increasing borrowing limits: 55,782,761 10,934,163 4,135,591 36,373,890
</TABLE>
6
<PAGE>
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SELIGMAN GROWTH FUND
- --------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS DECEMBER 31, 1995
<TABLE>
<CAPTION>
PERCENT PERCENT OF
OF NET NET ASSETS
ISSUES COST VALUE ASSETS DEC. 31, 1994
------ ------------ ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term Holdings .......... 1 $ 1,014,270 $ 1,014,270 0.2 4.0
--- ------------ ------------ ----- -----
Common Stocks and Convertible Securities:
Aerospace................................... 1 11,214,838 13,715,625 2.3 --
Automotive and Related...................... 3 8,928,536 13,565,000 2.2 8.0
Building and Construction................... -- -- -- -- 0.2
Business Services........................... 7 42,024,412 74,787,500 12.4 7.6
Chemicals................................... 4 16,616,568 15,213,352 2.5 0.4
Consumer Goods and Services................. 8 32,240,586 42,398,749 7.0 9.4
Drugs and Health Care....................... 13 87,249,864 120,701,835 20.0 14.3
Electronics................................. 1 753,837 541,800 0.1 --
Energy...................................... 1 1,886,526 1,437,500 0.2 0.5
Financial Services.......................... 12 60,452,068 93,810,588 15.5 7.8
Industrial Equipment........................ 7 26,620,507 31,335,352 5.2 2.7
Leisure and Entertainment................... 6 36,634,689 40,419,357 6.7 6.8
Metals...................................... -- -- -- -- 1.0
Printing and Publishing..................... 1 1,725,354 2,661,692 0.4 0.4
Retail Trade................................ 5 24,339,515 24,720,665 4.1 11.9
Steel....................................... 2 6,136,497 5,815,625 1.0 --
Technology.................................. 13 60,639,799 71,736,146 11.9 14.2
Telecommunications.......................... 5 25,454,893 25,156,250 4.2 6.9
Tobacco..................................... 1 7,615,474 11,312,500 1.9 --
Transportation.............................. -- -- -- -- 0.4
Miscellaneous............................... 4 11,450,098 13,578,457 2.2 3.5
--- ------------ ------------ ----- -----
94 461,984,061 602,907,993 99.8 96.0
--- ------------ ------------ ----- -----
Net Assets ................................ 95 $462,998,331 $603,922,263 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
7
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SELIGMAN GROWTH FUND
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LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
-----------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- --------- -------- --------
Century Telephone Enterprises 100,000 100,000
Duracell International...... 135,000 135,000
Guidant..................... 100,000 100,000
Hewlett-Packard............. 50,000 75,000
MBNA........................ 100,000 100,000
Nordstrom................... 125,000 175,000
Nucor....................... 75,000 75,000
Sterling Software........... 100,000 100,000
United Healthcare .......... 50,000 200,000
Xerox....................... 65,000 65,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- ---------- -------- --------
Applied Materials........... 160,000(1) --
Capital Cities/ABC.......... 50,000 --
Citicorp.................... 75,000 100,000
DSC Communications.......... 125,000 --
General Nutrition........... 140,000 --
HFS Group................... 150,000 150,000
Linear Technology........... 200,000 --
MGM Grand................... 200,000 --
Oracle Systems.............. 150,000 --
Silicon Graphics............ 150,000 --
* Largest portfolio changes from the previous quarter to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 80,000 shares received as a result of a 2-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- --------- -----------
American International Group............ $20,812,500
First Data.............................. 15,046,875
Pfizer.................................. 14,175,000
Boeing.................................. 13,715,625
Schering-Plough......................... 13,687,500
United Healthcare....................... 13,100,000
Pacific Health Systems.................. 13,087,500
Interpublic Group of Companies.......... 13,012,500
Columbia/HCA Healthcare................. 12,687,500
HFS Group............................... 12,262,500
8
<PAGE>
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PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS 99.7%
AEROSPACE 2.3%
Boeing
Aircraft manufacturer...... 175,000 $ 13,715,625
-------------
AUTOMOTIVE AND RELATED 2.2%
Autoliv (ADRs)+*
Swedish supplier of safety
restraint systems.......... 40,000 2,340,000
Echlin
Manufacturer of motor vehicle
replacement parts.......... 150,000 5,475,000
Harley-Davidson
Motorcycle manufacturer.... 200,000 5,750,000
-------------
13,565,000
-------------
BUSINESS SERVICES 12.4%
Alco Standard
Distributor of paper and office
equipment.................. 175,000 7,984,375
First Data
Credit card processing
services................... 225,000 15,046,875
General Motors (Class E)
Worldwide automotive
manufacturer............... 225,000 11,700,000
HFS Group*
Hotel and motel franchises. 150,000 12,262,500
Interpublic Group of Companies
Worldwide advertising agency 300,000 13,012,500
Reynolds & Reynolds (Class A)
Supplier of information systems
to auto and medical industries 200,000 7,750,000
SunGard Data Systems*
Back up computer services for
disaster recovery.......... 250,000 7,031,250
-------------
74,787,500
-------------
CHEMICALS 2.5%
Air Products & Chemicals
Industrial gases and chemicals 150,000 7,912,500
Bayer AG
Producer of specialty chemicals,
pharmaceuticals, and plastics 6,700 1,776,095
Engelhard
Specialty chemicals and
metals..................... 200,000 4,350,000
European Vinyls
Market leaders in PVC
industry................... 45,300 1,174,757
-------------
15,213,352
-------------
SHARES VALUE
------ -----
CONSUMER GOODS AND SERVICES 7.0%
Adidas
Sporting equipment, footware 40,000 $ 2,110,686
Coca-Cola
Soft drinks, consumer products 100,000 7,425,000
Duracell International
Alkaline batteries......... 135,000 6,986,250
Gillette
Personal care products..... 175,000 9,121,875
Gucci
Manufacturer and marketer
of apparel................. 23,500 913,563
LVMH Moet-Hennessey
Producers of wine, spirits,
and luxury products........ 10,000 2,078,875
Mattel
Manufacturer of dolls, games,
and action and activity toys 175,000 5,381,250
PepsiCo
Soft drinks, consumer goods 150,000 8,381,250
-------------
42,398,749
-------------
DRUGS AND HEALTH CARE 20.0%
Amgen*
Biotechnology company...... 200,000 11,862,500
Columbia/HCA Healthcare
Health care facilities and
services................... 250,000 12,687,500
Genzyme*
Biomedical and genetic
products................... 75,000 4,668,750
Guidant
Cardiac rhythm management
and coronary artery disease
intervention............... 100,000 4,225,000
Johnson & Johnson
Health care products....... 125,000 10,703,125
Medtronic
Manufacturer of pacemakers
and related cardiovascular
products................... 150,000 8,381,250
Oxford Health Plans*
Health maintenance
organization............... 125,000 9,218,750
PacifiCare Health Systems
(Class B)*
Health maintenance
organization............... 150,000 13,087,500
Pfizer
Health care consumer
products; specialty chemicals 225,000 14,175,000
9
<PAGE>
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PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
DRUGS AND HEALTH CARE (continued)
Protein Design Laboratories*
Antibody technology........ 125,000 $ 2,875,000
Roussel
French developer and
manufacturer of specialty
pharmaceuticals............ 12,000 2,029,960
Schering-Plough
Pharmaceuticals, health and
personal care products..... 250,000 13,687,500
United Healthcare
Health maintenance
organization............... 200,000 13,100,000
-------------
120,701,835
-------------
ENERGY 0.2%
Huaneng Power International
(ADRs)*
Diversified Chinese energy
company.................... 100,000 1,437,500
-------------
FINANCIAL SERVICES 15.5%
American International Group
International insurance.... 225,000 20,812,500
Citicorp
New York commercial bank... 100,000 6,725,000
Federal National Mortgage
Association
Mortgage financing......... 75,000 9,309,375
General Re
Property casualty reinsurer 75,000 11,625,000
Green Tree Financial
Loans for manufacturered
homes...................... 300,000 7,912,500
Internationale Nederlanden Bank
Insurance and banking group 33,825 2,255,000
MBNA
Issuer of bank credit cards 100,000 3,687,500
MGIC Investment
Private mortgage insurance. 150,000 8,137,500
Norwest
Midwest bank............... 250,000 8,250,000
SunAmerica
Diversified financial services,
specializing in pre-retirement
savings.................... 112,500 5,343,750
UTD Overseas Bank
Second largest bank in
Singapore.................. 228,000 2,192,463
Wells Fargo
Commercial banking in
California................. 35,000 7,560,000
-------------
93,810,588
-------------
SHARES VALUE
------ -----
INDUSTRIAL EQUIPMENT 5.2%
BBC Brown Boverie
Manufacturer of heavy
equipment for electric power
generation and distribution 2,000 $ 2,322,357
FKI Babcock
Electrical engineering
company.................... 875,000 2,240,483
General Electric
Supplier of electrical equipment
and other industrial and
consumer products.......... 150,000 10,800,000
Glory Kogyo
Highly specialized company
servicing banking automations 25,000 917,874
Illinois Tool Works
Fasteners, tools, and plastic
items...................... 75,000 4,425,000
Keyence
Producer of detection devices for
the manufacturing process.. 15,000 1,724,638
Xerox
Office equipment and
supplies................... 65,000 8,905,000
-------------
31,335,352
-------------
LEISURE AND ENTERTAINMENT 6.7%
Circus Circus Enterprises*
Casino hotels.............. 300,000 8,362,500
Disney, Walt
Theme parks, hotels, films. 125,000 7,375,000
Granada Group
Radio and television
broadcasting, publishing... 230,000 2,302,169
Mirage Resorts*
Manager of casinos in
Las Vegas.................. 225,000 7,762,500
Scandinavian Broadcast System
Television broadcasting in
Scandinavia................ 125,000 2,773,438
Viacom (Class B)
Diverse entertainment
communications company..... 250,000 11,843,750
-------------
40,419,357
-------------
10
<PAGE>
================================================================================
December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PRINTING AND PUBLISHING 0.4%
Reed Elsevier
Global printer and publisher
of professional trade
journals and magazines..... 200,000 $ 2,661,692
-------------
RETAIL TRADE 4.1%
Eckerd*
Operator of drug store chain 100,000 4,462,500
Home Depot
Chain of home improvement
stores..................... 150,000 7,181,250
Hornbach Baumarkt
A large home improvement
and garden center retailer
in Germany................. 25,000 1,073,790
Nordstrom
Department stores.......... 175,000 7,065,625
Office Depot*
Office supply retailer..... 250,000 4,937,500
-------------
24,720,665
-------------
STEEL 1.0%
Nucor
Mini-mill steel production. 75,000 4,284,375
Pohang Iron & Steel (ADRs)
A leading Korean
steel manufacturer......... 70,000 1,531,250
-------------
5,815,625
-------------
TECHNOLOGY 11.9%
Cisco Systems*
Computer network routers... 150,000 11,203,125
Farnell Electronics
Manufacturer and distributor of
electronic and electrical
equipment ................ 250,000 2,789,450
Hewlett-Packard
Computers and peripherals.. 75,000 6,281,250
Informix
Designer, manufacturer, and
supporter of database management
systems.................... 150,000 4,509,375
Intel
Semiconductor manufacturer. 150,000 8,521,875
Lam Research*
Manufacturer of plasma etching
equipment.................. 75,000 3,421,875
Microsoft*
Microcomputer software..... 100,000 8,781,250
SHARES VALUE
------ -----
Olivetti
PCs, software, minicomputers
and peripheral equipment... 3,000,000 $ 2,404,912
Secom
Manufacturer of electronic
instrumentation............ 30,000 2,081,159
Sterling Software
Software and network services;
automated program design
software................... 100,000 6,237,500
Tektronix
Manufacturer of electronic
equipment.................. 100,000 4,912,500
3Com*
Supplier of adapter cards, hubs,
and routers for local area
computer networks.......... 100,000 4,668,750
Xilinx*
Specialized semiconductors. 195,000 5,923,125
-------------
71,736,146
-------------
TELECOMMUNICATIONS 4.2%
American Telephone & Telegraph
International and domestic
telecommunications services 100,000 6,475,000
Century Telephone Enterprises
Regional telephone and cellular
services................... 100,000 3,175,000
Motorola
Producer of wireless
telecommunications equipment 100,000 5,700,000
Scientific-Atlanta
Satellite networks......... 300,000 4,500,000
WorldCom*
Long distance carrier...... 150,000 5,306,250
-------------
25,156,250
-------------
TOBACCO 1.9%
Philip Morris
Tobacco manufacturer....... 125,000 11,312,500
-------------
MISCELLANEOUS 2.2%
HIS
A leading discount tour
operator in Japan.......... 45,000 2,143,478
Land and General Berhad
Malaysian conglomerate with
interests in timber, real estate
development, and investment
services................... 500,000 1,083,104
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES OR
PRIN.AMT. VALUE
--------- -----
MISCELLANEOUS (continued)
Nera (ADSs)
Wireless equipment and billing
services for INMARSAT global
satellite communications network
and microwave radio relay.. 45,000shs. $ 1,445,625
Tyco International
Fire protection services worldwide 250,000 8,906,250
-------------
13,578,457
-------------
TOTAL COMMON STOCKS
(Cost $461,230,224) ..... 602,366,193
-------------
CONVERTIBLE BONDS 0.1%
(Cost $753,837)
ELECTRONICS 0.1%
United Micro Electronics
11/4%, 6/8/2004............ $430,000 541,800
-------------
SHORT-TERM HOLDINGS 2.5%
(Cost $15,100,000) ...... 15,100,000
-------------
TOTAL INVESTMENTS 102.3%
(Cost $477,084,061) ..... 618,007,993
OTHER ASSETS LESS
LIABILITIES (2.3)% ..... (14,085,730)
-------------
NET ASSETS 100.0% .......... $603,922,263
=============
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP. See
notes to financial statements.
12
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Common stocks and convertible securities (cost $461,984,061).................. $ 602,907,993
Short-term holdings (cost $15,100,000)....................................... 15,100,000 $ 618,007,993
-------------
Cash.......................................................................................... 6,848,593
Receivable for securities sold................................................................ 12,840,063
Receivable for dividends and interest......................................................... 574,451
Receivable for Capital Stock sold............................................................. 352,884
Investment in, and expenses prepaid to, shareholder service agent............................. 93,258
Net unrealized appreciation on forward currency contracts..................................... 2,198
Other......................................................................................... 124,517
-------------
Total Assets ................................................................................. 638,843,957
-------------
LIABILITIES:
Payable for securities purchased.............................................................. 32,889,345
Payable for Capital Stock repurchased......................................................... 1,122,677
Accrued expenses, taxes, and other............................................................ 909,672
-------------
Total Liabilities ............................................................................ 34,921,694
-------------
Net Assets .................................................................................. $ 603,922,263
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 150,000,000 shares authorized; 115,776,071
shares outstanding):
Class A..................................................................................... $ 114,483,498
Class D..................................................................................... 1,292,573
Additional paid-in capital.................................................................... 332,423,365
Dividends in excess of net investment income.................................................. (215,986)
Undistributed net realized gain............................................................... 15,018,871
Net unrealized appreciation of investments.................................................... 140,030,884
Net unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts........................... 889,058
-------------
Net Assets .................................................................................. $ 603,922,263
=============
NET ASSET VALUE PER SHARE:
Class A ($597,510,514 divided by 14,483,498 shares) .......................................... $5.22
=====
Class D ($6,411,749 divided by 1,292,573 shares) ............................................. $4.96
=====
</TABLE>
13
<PAGE>
- ----------
See notes to financial statements.
================================================================================
Statement of Operations For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $127,323)........................... $ 5,460,868
Interest........................................................................ 689,049
-----------
Total investment income......................................................... $ 6,149,917
EXPENSES:
Management fee.................................................................. 2,706,813
Distribution and service fees................................................... 1,207,717
Shareholder account services.................................................... 899,231
Shareholder reports and communications.......................................... 119,664
Auditing and legal fees......................................................... 95,272
Registration.................................................................... 78,552
Directors' fees and expenses.................................................... 51,791
Shareholders' meeting........................................................... 18,000
Miscellaneous................................................................... 49,991
-----------
Total expenses.................................................................. 5,227,031
------------
Net investment income ........................................................ 922,886
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments................................................ 78,316,368
Net realized gain from foreign currency transactions............................ 406,810
Net change in unrealized appreciation of investments............................ 61,247,607
Net change in unrealized appreciation on translation of
assets and liabilities denominated in foreign
currencies and forward currency contracts.................................... 395,616
-----------
Net gain on investments and foreign currency transactions ...................... 140,366,401
------------
Increase in net assets from operations ......................................... $141,289,287
============
</TABLE>
- ----------
See notes to financial statements.
14
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................................ $ 922,886 $ 747,696
Net realized gain on investments............................................. 78,316,368 51,360,333
Net realized gain (loss) from foreign currency transactions.................. 406,810 (32,375)
Net change in unrealized appreciation of investments......................... 61,247,607 (75,155,232)
Net change in unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies and forward currency contracts.......... 395,616 493,442
------------ ----------
Increase (decrease) in net assets from operations............................ 141,289,287 (22,586,136)
------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income-- Class A.............................................. (1,048,188) (1,043,314)
Net realized gain on investments:
Class A.................................................................... (62,681,650) (52,165,692)
Class D.................................................................... (685,513) (180,695)
------------ ----------
Decrease in net assets from distributions.................................... (64,415,351) (53,389,701)
------------ ----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------------------------------
YEAR ENDED DECEMBER 31
------------------------------
CAPITAL SHARE TRANSACTIONS: 1995 1994
---------- ----------
<S> <C> <C> <C> <C>
Net proceeds from sale of shares:
Class A................................ 1,963,645 1,199,567 9,903,613 6,135,690
Class D................................ 881,669 183,876 4,318,133 922,899
Investment of dividends-- Class A........ 141,801 164,106 734,496 733,553
Exchanged from associated Funds:
Class A................................ 7,453,091 4,032,992 39,381,227 20,642,340
Class D................................ 207,215 14,699 1,088,175 70,526
Shares issued in payment of gain distributions:
Class A................................ 9,630,233 9,228,545 49,877,844 41,252,296
Class D................................ 133,979 40,305 659,149 173,521
---------- ---------- ----------- ----------
Total.................................... 20,411,633 14,864,090 105,962,637 69,930,825
---------- ---------- ----------- ----------
Cost of shares repurchased:
Class A................................ (8,896,248) (9,117,651) (45,562,371) (46,398,985)
Class D................................ (94,062) (33,070) (462,501) (164,282)
Exchanged into associated Funds:
Class A................................ (8,899,690) (4,857,920) (46,762,125) (24,834,019)
Class D................................ (233,991) (37,097) (1,197,160) (176,395)
---------- ---------- ------------ ------------
Total.................................... (18,123,991) (14,045,738) (93,984,157) (71,573,681)
---------- ---------- ------------ ------------
Increase (decrease) in net assets from
capital share transactions............ 2,287,642 818,352 11,978,480 (1,642,856)
========== ========== ------------ ------------
Increase (decrease) in net assets.................................................. 88,852,416 (77,618,693)
NET ASSETS:
Beginning of year.................................................................. 515,069,847 592,688,540
------------ ------------
End of year (including dividends in excess of net investment
income of $215,986 and $196,776, respectively).................................. $603,922,263 $515,069,847
============ ============
</TABLE>
- ----------
See notes to financial statements.
15
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Growth Fund, Inc. (the "Fund") offers two classes of shares. All
shares existing prior to May 3, 1993, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class D shares are sold without
an initial sales charge but are subject to a distribution fee of up to 0.75% and
a service fee of up to 0.25% on an annual basis, and a contingent deferred sales
load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in stocks and U.S. Government securities are valued at current
market values or, in their absence, at fair value determined in accordance
with procedures approved by the Board of Directors. Securities traded on
national exchanges are valued at last sales prices or, in their absence and
in the case of over-the-counter securities, a mean of bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized
cost.
b. The books and records of the Fund are maintained in U.S. dollars. The
market value of investment securities and other assets and liabili-ties
denominated in foreign currencies are translated into U.S. dollars at the
closing daily rate of exchange as reported by a pricing service. Purchases
and sales of investment securities, income, and expenses are translated
into U.S. dollars at the rate of exchange prevailing on the respective
dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
c. There is no provision for federal income or excise tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
d. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income
tax purposes. Dividends receivable and payable are recorded on ex-dividend
dates. Interest income is recorded on an accrual basis.
e. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares
based upon the relative value of shares of each class. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged
directly to such class.
f. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or capital gain, and the
recharacterization of foreign exchange gains or losses to either ordinary
or realized capital gain for federal income tax purposes. Where such
differences are permanent in nature, they are reclassified in the
components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassifications will have no effect
on net assets, results of operations, or net asset value per share of the
Fund.
16
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1995, amounted to $559,555,817 and
$591,309,732, respectively.
At December 31, 1995, the cost of investments for federal income tax
purposes was $477,813,828, and the tax basis gross unrealized appreciation and
depreciation of portfolio securities, including the effects of foreign currency
translations, amounted to $149,104,397 and $8,910,232, respectively.
4. At December 31, 1995, the Fund owned short-term investments which matured in
less than 7 days.
5. J. & W. Seligman & Co. Incorporated (the "Manager") manages the
affairs of the Fund and provides the necessary personnel and facilities.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager. The Manager receives a fee, calculated daily and
payable monthly, equal to a per annum percentage of the Fund's daily net assets.
The management fee for 1995 was calculated on a sliding scale of 0.50% to 0.44%,
based on average daily net assets of all investment companies managed by the
Manager. The management fee for the year ended December 31, 1995, was equivalent
to an annual rate of 0.48% of the average daily net assets of the Fund. Seligman
Henderson Co. (the "Subadviser"), a 50% owned affiliate of the Manager, is
entitled to a portion of the Manager's fee for acting as Subadviser for certain
of the international investments of the Fund.
Effective January 1, 1996, the management fee rate is 0.70% of the first $1
billion of the Fund's average daily net assets, 0.65% of the next $1 billion of
average daily net assets and 0.60% of average daily net assets in excess of $2
billion.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $20,299 from sales of Class A shares after commissions of
$157,932 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the year ended December 31, 1995, fees paid aggregated $1,168,109
or 0.21% per annum of the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the year ended December 31, 1995,
fees paid amounted to $39,608, or 1% per annum of the average daily net assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1995, such charges amounted to $1,751.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became eligible to receive commissions from certain sales of shares of
the Fund, as well as distribution and service fees pursuant to the Plan. For the
period ended December 31, 1995, Seligman Services, Inc. received commissions of
$13,509 from sales of shares of the Fund. Seligman Services, Inc. also received
distribution and service fees of $404,497, pursuant to the Plan.
17
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $886,231 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $43,170.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Subadviser, the Distributor, Seligman Services, Inc., and/or
Seligman Data Corp.
Fees of $31,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1995, of
$215,986 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
6. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
--------- ---------
Distribution and service fees..... $1,168,109 $39,608
Registration...................... 22,888 7,029
Shareholder reports and
communications................. 16,532 697
7. At December 31, 1995, the Fund had an outstanding forward currency contract
to sell foreign currency to hedge its exposure to changes in foreign currency
exchange rates on foreign currency held as follows:
SETTLEMENT CONTRACT IN EXCHANGE UNREALIZED
DATE TO RECEIVE FOR APPRECIATION
- ------------- ------------- ----------- -------------
1/5/96 $505,621 JPY(1) 52,104,271 $2,198
(1) Japanese Yen.
18
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
----------------------------------------------- ---------------------------
YEAR ENDED 5/3/93*
YEAR ENDED DECEMBER 31 DECEMBER 31 TO
----------------------------------------------- -----------------
1995** 1994** 1993 1992 1991 1995** 1994** 12/31/93
------ ------ ------ ------ ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period.................. $4.54 $5.26 $6.04 $5.95 $4.57 $4.38 $5.23 $5.67
----- ----- ----- ----- ----- ----- ----- -----
Net investment income (loss).. .01 .01 .01 .03 .04 (.04) (.12) (.03)
Net realized and unrealized
investment gain (loss)..... 1.27 (.22) .35 .64 1.70 1.21 (.23) .72
Net realized and unrealized gain
on foreign currency transactions .01 -- -- -- -- .01 -- --
----- ----- ----- ----- ----- ----- ----- -----
Increase (decrease) from
investment operations...... 1.29 (.21) .36 .67 1.74 1.18 (.35) .69
Dividends paid ............... (.01) (.01) (.01) (.03) (.04) -- -- --
Distributions from net
gain realized.............. (.60) (.50) (1.13) (.55) (.32) (.60) (.50) (1.13)
----- ----- ----- ----- ----- ----- ----- -----
Net increase (decrease) in
net asset value............ .68 (.72) (.78) .09 1.38 .58 (.85) (.44)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period $5.22 $4.54 $5.26 $6.04 $5.95 $4.96 $4.38 $5.23
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 28.47% (3.84)% 6.20% 11.30% 38.45% 27.01% (6.56)% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .94% .90% .89% .77% .76% 1.91% 2.93 2.17%+
Net investment income (loss) .
to average net assets...... .17% .14% .18% .49% .77% (.83)% (2.34)% (1.03)%+
Portfolio turnover............ 102.30% 93.59% 105.64% 46.96% 12.60% 102.30% 93.59% 105.64%++
Net assets, end of period
(000's omitted)............. $597,510 $513,328 $591,491 $614,860 $598,423 $6,412 $1,742 $1,197
</TABLE>
- ----------
*Commencement of offering of Class D shares.
**Per share amounts for the years ended December 31, 1995 and 1994, are
calculated based on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
19
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN GROWTH FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Growth Fund, Inc. as of December 31,
1995, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the Fund's custodians and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Growth
Fund, Inc. as of December 31, 1995, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
20
<PAGE>
================================================================================
Board of Directors
- --------------------------------------------------------------------------------
Fred E. Brown
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2, 4
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
Alice S. Ilchman 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
Frank A. McPherson 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
John E. Merow
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
Betsy S. Michel 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
William C. Morris 1
CHAIRMAN
CHAIRMAN OF THE BOARD AND PRESIDENT,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
James C. Pitney 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
James Q. Riordan 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
Ronald T. Schroeder 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
James N. Whitson 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
Brian T. Zino 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
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<PAGE>
================================================================================
Executive Officers
- --------------------------------------------------------------------------------
William C. Morris
CHAIRMAN
Brian T. Zino
PRESIDENT
Loris D. Muzzatti
VICE PRESIDENT
Lawrence P. Vogel
VICE PRESIDENT
Thomas G. Rose
TREASURER
Frank J. Nasta
SECRETARY
- --------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
Subadviser
Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
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